Theoretical Framework and Literature Review

This chapter provides a comprehensive review of the literature on multinational enterprises (MNEs) from the perspective of International Political Economy, focusing on the various theoretical frameworks that have been used to explain the behavior of MNEs in the global market. The chapter then explores the root causes of host country political risk, drawing on theories of the interdependence between sovereign states and MNEs. Finally, the chapter summarizes previous studies on the relationship between host country political risk and Chinese outward foreign direct investment, highlighting the need for a new measurement index that reflects Chinese companies’ views on host country political risk.