Location Choice Of Chinese Firms Into Africa:the Role Of Institutional Pressure And Bilateral Ties

This study summarizes my Ph D research project experience;the emerging nature of my research topic informed the selection of a research approach combining a qualitative case study and a quantitative empirical study testing theory.The research seeks to explain the mechanism through which Chinese firms choose one Africa country location over another.The case study based on prior literature review,employs interviews,observation and document analysis research designs and finds hospitality of the African governments and its people,ease of travel and live in the country as some location choice determinants.Firms from similar industries mimic each other whereas firms with higher resource strength receive government support and hence pursue home country priorities while those without strong resources try several opportunistic business ventures presented by the choice country.Studying the effect of bilateral relations,country risk,coercive pressure from government ownership and mimetic pressure from Chinese firms already investing in Africa on location choice,this research finds a higher likelihood of Chinese firms investing in an African country with increasingly more prior Chinese firms' investments and increased government visits and exchanges reduce the unfavorable effect of country risk.The frequency and recentness of contacts and visits fosters positive sentiments towards the host country which in turn creates an open and friendly investment environment for investing firms to overcome liability of foreignness.The study thus emphasizes the need for home and host country governments to work together in sending friendly signals to firms and promoting the location attractiveness of a country.