Regulatory institutions, natural resource endowment and location choice of emerging-market FDI: A dynamic panel data analysis

This study extends emerging market (EM) foreign direct investment (FDI) research by integrating the institution-based view and the locational advantage perspective to investigate the interactive effects of natural resource endowment in a host country and institutional factors on location choice of EM multinational enterprises (MNEs). Based on Chinese FDI to 62 countries, our results show that host country attractiveness of natural resource endowment is contingent on the institutional constraints from both host and home country settings. While political risk positively moderates the direct link between natural resource endowment and FDI, economic freedom and institutional distance negatively moderate the link. That is, natural resource endowment is more attractive to FDI by Chinese MNEs when political risk is high and economic freedom and institutional distance are low.