Riding on the Dragon: Host Country Regulatory Constraints and FDI Bandwagon Diffusions in China

• DOI: 10.5465/ambpp.2014.15748abstract
• Publication Date: 2015-04-06T20:54:55Z
• Authors: Jing Yu (Gracy) Yang
• Keywords: Bandwagon effect

This study examines observation- and network-based bandwagon phenomenon of foreign direct investments (FDI) among global investors from different home countries into a host country. We argue that the two bandwagons both drive FDI entries country, yet their effects magnitude depend on country’s regulatory constraints. Our analysis FDIs in manufacturing industries China 54 over its early (1979-95) period transition corroborates ideas. identify network associated with trade networks between investors’ nations find this together observation international during study. also effect observation-based is weaker whilst stronger restricted than non-restricted for FDI. The findings highlight asymmetric country institutional constraints bandwagons.