AIB 2012 Conference Proceedings - Academy of International ...

MONDAY
proposed. (For more information, please contact: Hamid Yeganeh, Winona State University, USA:
hyeganeh@winona.edu)
How Do Top Managers and Powerful External Actors Affect the Relationship between Resistance and Adoption
of Diffusing Practice An Integrating Framework
Qian Lu, National University of Singapore
Jieyu Zhou, Hong Kong University of Science and Technology
We provide a framework to examine how resistance impacts firm's adoption of new diffusing practice. In our
framework, Firm's adoption toward the new practice is classified according to two dimensions: completeness of
implementation and fidelity of framing. We argue that the relationships among firm's resistance and the two
ends of adoption are affected by different agents: Top manager's perception of the new practice moderates the
effect of resistance on completeness of implementation, while resistance's influence on fidelity of framing
depends on powerful external actors' perception toward the new practice. The national system serves as the
boundary condition for the framework. (For more information, please contact: Qian Lu, National University of
Singapore, Singapore: luqian@nus.edu.sg)
Session: 2.4.15 - Interactive
Track: 3 - IB Theory, FDI, and Entry Mode
MNEs from Emerging Markets, MNEs in Emerging Markets
Presented On: July 2, 2012 - 14:30-15:45
Chair: Jiawen Yang, George Washington University
FDI Outflows and Domestic Investment in the BRIC Countries: An Empirical Exercise
Nandita Dasgupta, UMBC
The emerging economies such as Brazil, Russia, India and China (BRIC) are aggressively pursuing international
investment practices through outbound foreign direct investment (OFDI) activities since the implementation of
their outward looking development strategies. The increasing FDI outflows from these countries have naturally
raised concerns relating to the repercussions on their domestic investment and capital formation from the
perspective of economic development and growth. The concern arises because OFDI activities could shift not
only some of the production activities from home to foreign destinations but also could possibly threaten the
availability of scarce financial resources at home by allocating resources abroad. All this have the potential to
reduce domestic investment, thus lowering the long run domestic economic growth and employment. The
central goal of this paper is to empirically investigate and evaluate the evidence of the macroeconomic
relationship between OFDI and levels of domestic capital formation in the BRIC economies. This study is
carried out in two broad steps. The first step is a time series data analysis where we have performed country
level exercise to estimate the causal relationship between OFDI and domestic investment in each of the four
BRIC countries. Given the limitations on data availability, we had to restrict ourselves to a bivariate analysis with
gross capital formation (GCF: measure of domestic investment) and OFDI as the only two variables. In the next
step, we have employed a balanced panel of four BRIC countries over the period of 19 years from 1992 through
2010. The choice of our variables is basically from the Feldstein (1995) model, which includes FDI inflows and
outflows, domestic savings as well as other variables that might jointly influence domestic investment. (For
more information, please contact: Nandita Dasgupta, UMBC, USA: nandita@umbc.edu)
AIB 2012 Conference Proceedings
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