The Impact of Political Risk of Host Country on the Performance of MNEs’ OFDI: The Joint Moderating effect of Capability of Risk Management and Discretion of Host Country
Author:
Affiliation:
College of Business Administration,Northeastern University,Shenyang,110169
Based on the theory of transaction cost, using data of MNEs listed in Shanghai and Shenzhen stock exchange from 2008 to 2018 of China, analyzing the impact of political risk of host country on the performance of MNEs’ OFDI, and discussing the moderating effect of capability of risk management and the joint moderating effect of capability of risk management and discretion of host country. The results show that political risk of host country hinders the performance of MNEs’ OFDI; The capability of risk management will alleviate the nagative effect of host country’s political risk on the performance of OFDI; The discretion of host country can strengthen the moderating role of capability of risk management; The above conclusion is more significant for MNEs of gradually global and MNEs in the income state. This paper is of great significance to MNEs’ decision-making of political risk in OFDI, and how to carry out effective risk-management to improve the performance of OFDI in emerging economies represented by China.