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<p>We examine how different types of ownership (state, private, and Sino–foreign joint venture) of China's MNEs respond to a significant revision in China’s long-standing industrial policy on their outward foreign direct investment (OFDI) location choices. International business literature generally views China as a state-led institutional system and often treats Chinese OFDI as a monolithic category, overlooking key ownership distinctions and policy impacts. Drawing on ownership competence theory and extending it with institutional competence, we argue that Chinese MNE owner types differ in their objectives, governance capabilities, and ability to navigate institutional environments. We connect this owner-type logic to the national business systems perspective to explain host-country business-system selection. Analyzing 7000 Chinese OFDI transactions between 2003 and 2019, our findings reveal that each owner type preferred business systems locations changed following a revision from a ‘go global market-oriented’ policy toward a ‘technological, self-reliance’ policy initiated after the accession of Xi Jinping as the General Secretary of the CCP in 2012. The industrial policy shift highlights the need for host-country policymakers to differentiate among Chinese owner types when designing investment screening, investment-attraction measures, and project-level governance safeguards. We show that industrial policy and institutional fit jointly shape location choices and propose policy implications for host-country policymakers.</p>

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China’s industrial policy and OFDI location: an integrated framework of national business systems and ownership perspectives

  • 期刊论文

  • 发表日期：

    2026年7月28日

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  • Zhixiang Steven Liang,
  • Michael Carney,
  • Yue Zhao

摘要

We examine how different types of ownership (state, private, and Sino–foreign joint venture) of China's MNEs respond to a significant revision in China’s long-standing industrial policy on their outward foreign direct investment (OFDI) location choices. International business literature generally views China as a state-led institutional system and often treats Chinese OFDI as a monolithic category, overlooking key ownership distinctions and policy impacts. Drawing on ownership competence theory and extending it with institutional competence, we argue that Chinese MNE owner types differ in their objectives, governance capabilities, and ability to navigate institutional environments. We connect this owner-type logic to the national business systems perspective to explain host-country business-system selection. Analyzing 7000 Chinese OFDI transactions between 2003 and 2019, our findings reveal that each owner type preferred business systems locations changed following a revision from a ‘go global market-oriented’ policy toward a ‘technological, self-reliance’ policy initiated after the accession of Xi Jinping as the General Secretary of the CCP in 2012. The industrial policy shift highlights the need for host-country policymakers to differentiate among Chinese owner types when designing investment screening, investment-attraction measures, and project-level governance safeguards. We show that industrial policy and institutional fit jointly shape location choices and propose policy implications for host-country policymakers.