IACMR Research Seminar Series Session #27

Topic: Herd Protection in Foreign Direct Investments: The Asymmetric Roles of State- and Non-state-owned Enterprises
Speaker:Yan Anthea Zhang, Rice University
Time: 9:00 am-10:15 am, August 24, 2022 (China Time, UTC+8)
Language: Chinese


It has been well documented that firms tend to follow others in entering risky markets and that firms tend to follow those that are in the same industry, have larger size, better performance or share common business group membership. In this study, we argue that the pattern of following—WHO follows WHOM—depends upon the nature of the risk. Focusing on political risk in foreign direct investments, we argue that those with close connections with home country government are more like to be followed by others while those without close connections with home country government are more likely to follow others. We test these arguments in the context of Chinese firms’ foreign direct investments in 2001-2013. We find that the likelihood that a new Chinese investment is made in a host country is positively related to the number of Chinese invested firms already in that country, especially when the host country has a high level of political risk. We also find that a non-state-owned investor is more sensitive to the number of Chinese invested firms in a host country than a state-owned investor in their location choices. Moreover, the number of firms in a host country invested by Chinese state-owned enterprises plays a greater role in attracting subsequent Chinese investments than the number of firms invested by Chinese non-state-owned enterprises. Our arguments and findings can contribute to a better understanding on foreign direct investments of firms from a country, in which the boundary between government and firms is blurred.      


Dr. Yan “Anthea” Zhang is a professor and the Fayez Sarofim Vanguard Chair of Strategic Management at the Jones Graduate School of Business, Rice University. Her research focuses on CEO succession and corporate governance of public-listed companies, and foreign direct investment and technological entrepreneurship in emerging markets (notably China). Her research has been published in top academic journals, such as Academy of Management Journal, Strategic Management Journal, Journal of Marketing Research, Journal of Marketing, and Journal of International Business Studies. Her research has been widely cited in top business media outlets such as Harvard Business Review, Economist, Business Week, New York Times, Wall Street Journal, Washington Post, USA Today, and Financial Times. She has served as an associate editor of Academy of Management Journal and is an associate editor of Strategic Management Journal and an area editor of Journal of International Business Studies. She is the president-elect of Strategic Management Society (SMS) and had served on the board of SMS for six years before being elected the president. She received her Ph.D. in business administration from the University of Southern California, Master of Philosophy in international business from City University of Hong Kong, and BA and MA in economics from Nanjing University.