WU Liang, LV Hongjiang：The Influence of Network Externalities on Chinese MNEs' Overseas Location Choice

Abstract：Using a database including 836 MNEs in Shanghai Stock Exchange covering 56 countries or regions during 2000-2010 and conditional logit regression, this paper analyzes the influence of network externalities on Chinese MNEs' overseas location choice.The empirical results show that the network externality has an inverted U-shaped influence on Chinese MNEs' overseas location choice.At the same time, enterprise source and types of control can moderate the network externality, the effect of network externalities on enterprises in the same source is greater than different sources of enterprises, and the effect on the non-state-owned enterprises is greater than that on state-owned enterprises.Furthermore, in state-owned enterprises and non-state-owned enterprises, the effect on enterprises in the same source is also greater than that on the different source of enterprises; in enterprise from both the same source and different sources, the effect on non-state enterprises is also greater than that on state-owned enterprises.In addition, enterprise source and types of control have different power, the effect on non-state-owned enterprises from the same source is the most significant, and the effect on state-owned enterprises from different sources is the least significant.Finally, in a further test which excludes Hong Kong, above conclusions are also proved in addition to a small number of differences.

Key words： Network Externalities    Location Choice    Inverted U-shaped Relationship    Conditional Logit Regression

source:Finance & Trade Economics ,No.3,2015