Details of Research Outputs

In this study, we investigate how the local density of privately owned domestic firms (POEs) affects foreign subsidiary (FOE) exit in an emerging market. From the inter-population ecology perspective, we propose that the local density of POEs will have a U-shape relationship on FOE exit. Such relationship would be flatter in a region with better institutional development. We further build on the community ecology literature to propose that the effect will be stronger when POEs have prior collective actions to legitimize the market based identity and when FOEs have strong ability to draw identity from POEs. Using a panel dataset on manufacturing firms in China from 1998-2005, we find support for our hypotheses. We find the local density of POEs has a U-shape relationship on the FOE exit. The U-shape is flatter when the regional institutional development is high. In addition, the U-shape is steeper when the POEs have higher levels of intangible asset intensity and export intensity and when the FOEs have higher level of export intensity.