Cross-listing and foreign direct investment: an institutional arbitrage perspective on Chinese multinational enterprises
研究中国跨国企业交叉上市如何通过信誉溢价和流动性溢价提升对外直接投资的组合规模与地理分散度，且这种优势在制度成熟东道国更显著。
Purpose Through the lens of institutional arbitrage, this study considers the impact of cross-listing on foreign direct investment of multinational enterprises (MNEs) based in China. This study aims to propose that the advantages associated with cross-listing, identified as the credibility premium and mobility premium, significantly contribute to the international competitiveness of MNEs in constructing trade networks and overcoming market entry challenges. Design/methodology/approach Drawing on an analysis of over 20,000 foreign subsidiaries from China, it is found that cross-listing firms are more likely to have larger FDI portfolios and broader geographic dispersion than non-cross-listing firms. Moreover, the magnitude of these advantages depends on the institutional distance between the home and host countries. Findings The findings suggest that the benefits of cross-listing, particularly in terms of portfolio scope and geographic dispersion, are more pronounced in host countries with mature institutional frameworks. Originality/value This study contributes to the literature by enriching understanding of cross-listing beyond financial outcomes, thereby manifesting its effect on a firm’s international strategy. The research provides valuable insights into the internationalization strategies of Chinese multinationals and how a cross-listing strategy can provide a competitive advantage over domestic peers.