What is it about?
The purpose of the paper is to examine the role of institutional distance as a determinant of outward foreign direct investment (OFDI) from India. The study combines a nuanced view of institutional distance, with traditional location factors to analyze Indian OFDI flows to developed and emerging economies (EEs) during the period 2009 to 2017.
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Why is it important?
The findings of the study present important implications for policymakers and corporate managers. For policymakers, the study points toward the need for improving the general business environment at home to prevent escapist OFDI and trade enhancement as a tool to overcome cognitive barriers and behavioristic stereotypes. For corporate managers, the study's findings underline the importance of adopting different strategies for dealing with different isomorphic pressures in developed and emerging economies.
Perspectives
The study adds value to the sparse literature using the IBV in the emerging markets context, to supplement and enrich existing theoretical frameworks. It is a pioneering study in its use of institutional distance as an explanatory factor for Indian OFDI and provides evidence of institutional arbitrage.
Professor SUMATI VARMA
Delhi University
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This page is a summary of: Institutional distance as a determinant of outward FDI from India, International Journal of Emerging Markets, March 2021, Emerald,
DOI: 10.1108/ijoem-12-2019-1031.
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