Viewpoint escape FDI from emerging markets: clarifying and extending the concept

Purpose - The purpose of this paper is to examine the concepts of escape FDI and institutional voids using an industry study within a large emerging market (China). The author shows how regulatory and structural weaknesses in the Chinese dairy sector may prompt “escape” investment and how outsider firms might use such a strategy to regain competitiveness. Design/methodology/approach - The paper develops and refines an important international business concept which has received very little research attention, within the setting of an industry study. Findings - The concept of escape FDI is critiqued and extended to consider cases where discrimination occurs and industry restructuring triggers escape FDI. Research limitations/implications - The discussion is based on a single industry and home country. Further work to develop and test these ideas in a broader context is needed. Practical implications - The author identifies the conditions most likely to trigger escape FDI as well as firm and home country characteristics favouring such a strategy. Originality/value - The author extends the concept of escape FDI in the context of government-driven structural reform and political discrimination creating favoured “insider” firms and disadvantaged “outsiders”.