Unpacking the Impact of OFDI Speed and Rhythm on Innovation Performance: Evidence from Chinese Firms

Abstract

ABSTRACT In this study, we focus on the temporal behaviors – speed and rhythm – of outward foreign direct investment (OFDI) by emerging multinational enterprises (EMNEs) and examine the effect of such behaviors on innovation performance. Using a learning perspective, we argue that OFDI speed has an inverted U-shaped effect on EMNEs’ innovation performance, whereas the relationship between the uneven rhythm of OFDI and innovation performance is negative. The results, based on OFDI panel data of 1,092 Chinese firms, support our predictions that a moderate OFDI speed and a more regular pattern of OFDI expansion provide sources of competitiveness and contribute to firms’ innovation performance.