Outward foreign direct investment as escape response to home country institutional constraints


Journal Article

In this perspective paper we argue that outward foreign direct investment (OFDI) undertaken as escape response to perceived misalignment between firm needs and home country institutional conditions represents an important but under-explored phenomenon in the international business (IB) literature. We propose that, in advanced industrialized nations, the extent of OFDI as escape is likely to rise with the extent of societal coordination in the political economy. Societal coordination is associated with relatively slower rates of institutional adjustment and thus with relatively greater prevalence of misalignments that may drive OFDI. We illustrate the face validity of our argument and lay out the implications for future research in IB. © 2007 Academy of International Business. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Witt, MA; Lewin, AY

Published Date

  • July 19, 2007

Published In

Volume / Issue

  • 38 / 4

Start / End Page

  • 579 - 594

Electronic International Standard Serial Number (EISSN)

  • 1478-6990

International Standard Serial Number (ISSN)

  • 0047-2506

Digital Object Identifier (DOI)

  • 10.1057/palgrave.jibs.8400285

Citation Source

  • Scopus