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Extradition treaties and emerging market firms’ host country location choice✰
Hu, Tianyou1; Yu, Shu2; Delios, Andrew3
2024-06-01
Source PublicationJournal of World Business
ABS Journal Level4
ISSN1090-9516
Volume59Issue:4Pages:101542
Abstract

Traditional perspectives on interstate cooperation stress its benefits in facilitating foreign direct investment (FDI) by reducing uncertainty in international operations and enhancing mutual trust between countries. Our investigation explores another side of interstate cooperation by discussing the potential risks that can emerge from it. Our fulcrum for exploring risks comes from an explicit consideration of the divergent interests that can exist between nation states and business. We focus on the phenomenon known as bilateral treaties on extradition, which enable one country to request the repatriation of fugitives or convicted criminals from another country through official cooperation. Extradition treaties extend the jurisdictional influence of a firm's home country to a host country. This mechanism can create concerns for firms when they are motivated to use FDI to escape from their home country, especially from certain emerging markets with weak institutions. We propose that emerging market firms can be motivated to circumvent host countries that have established extradition treaties with their home country. Both private-owned and state-owned enterprises can show this behavior, albeit the effect is weaker for state-owned enterprises as compared to private-owned ones. The effect is particularly strong on firms that have documented malfeasance in their home country. We test these ideas on outward FDI made by Chinese firms in 106 foreign countries during 2001–2013.

KeywordChinese State-owned Enterprises Emerging Market Firms Extradition Fdi Interstate Cooperation Location Choice
DOI10.1016/j.jwb.2024.101542
URLView the original
Indexed BySSCI
Language英語English
WOS Research AreaBusiness & Economics
WOS SubjectBusiness
WOS IDWOS:001228273000001
PublisherELSEVIER SCIENCE INC, STE 800, 230 PARK AVE, NEW YORK, NY 10169
Scopus ID2-s2.0-85189979858
Fulltext Access
Citation statistics
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF MANAGEMENT AND MARKETING
Corresponding AuthorYu, Shu
Affiliation1.Department of Management and Marketing, Faculty of Business Administration, University of Macau, E22, Avenida da Universidade, Taipa, Macao
2.Department of Management, Monash University & Suzhou Industrial Park Monash Research Institute of Science and Technology, Suzhou SIP, No. 377 Linquan Street, Jiangsu, China
3.Department of Strategy & Policy, NUS Business School, National University of Singapore, Mochtar Riady Building, 15 Kent Ridge Drive, 119245, Singapore
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Hu, Tianyou,Yu, Shu,Delios, Andrew. Extradition treaties and emerging market firms’ host country location choice✰[J]. Journal of World Business, 2024, 59(4), 101542.
APA Hu, Tianyou., Yu, Shu., & Delios, Andrew (2024). Extradition treaties and emerging market firms’ host country location choice✰. Journal of World Business, 59(4), 101542.
MLA Hu, Tianyou,et al."Extradition treaties and emerging market firms’ host country location choice✰".Journal of World Business 59.4(2024):101542.
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