Research On The Impact Of Host Country OFDI Legitimacy On The Survival Of Chinese Overseas Subsidiaries

As an important carrier for multinational corporations(MNCs)in emerging economies to actively embed into the global value chain,develop and continue new advantages in international competition,overseas subsidiaries have become the most important part of outward foreign direct investment(OFDI).In recent years,with the rapid development of China’s OFDI,the phenomenon that overseas investment is "large but not strong" and generally low life span has gradually attracted the attention of scholars.Previous studies have discussed many factors that affect the survival or death of overseas subsidiaries from different perspectives,but these studies have ignored the possible role of OFDI legitimacy in the survival of enterprises.In fact,the level of OFDI legitimacy in the host country will not only affect the choice of Chinese enterprises in the international market,but also affect the operating results in the local institutional environment.In addition,enterprise heterogeneity is also an important aspect that affects overseas business performance,such as entry mode and property of ownership,but the existing results has not reached a consistent conclusion on the impact of the two.Taking "OFDI legitimacy" as a starting point,this paper combines institutional theory,population ecology theory and organizational identity theory to link entry mode and property of ownership,respectively,to explore the relationship between OFDI legitimacy in social-political and cognitive dimensions and the survival of overseas subsidiaries,and to discuss whether the heterogeneity of entry mode and property of ownership will have a moderating effect as situational factors,so as to provide different opinions and research conclusions.Based on the survival analysis method,this paper studies the survival duration of overseas subsidiaries of China’s A-share listed companies,and makes an empirical test on the main effect and moderating effect of overseas subsidiaries’ survival.The results show that the average survival time of Chinese overseas subsidiaries is 4.55years;social-political legitimacy and cognitive legitimacy have a positive impact on the survival of overseas subsidiaries,but the former has a greater impact;Compared with the joint venture entry mode,social-political legitimacy and cognitive legitimacy have a greater positive impact on the survival of wholly-owned overseas subsidiaries;Compared with state-owned enterprises,social-political legitimacy has a greater positive impact on the survival of overseas subsidiaries of private enterprises.This paper brings the legitimacy of OFDI’s socio-political and cognitive dimensions into the survival analysis framework of overseas subsidiaries,which not only enriches the existing research results,but also provides a useful reference for follow-up enterprises to "go global" better.