Determinants of outward foreign direct investment from BRIC countries: an explorative study

Outward foreign direct investment (FDI) of firms from Brazil, Russia, India and China has increased significantly during the last few years. Despite this trend, comprehensive research on the specific determinants and antecedents of outward FDI from BRIC countries is still underrepresented. The purpose of this paper is to give a more comprehensive understanding of outward FDI from BRIC countries.

Based on an exploratory approach, case studies of eight companies were conducted. Both a within‐case and a cross‐case approach were conducted.

The findings reveal the relevance of determinants on the country, industry and firm level. Gaining access to new markets is of utmost importance for all firms. Additionally, most companies seek to obtain access to technological resources and management know‐how, therefore emphasizing the availability of these resources in the target countries. While the internationalization of Brazilian and Indian companies is primarily driven by economic motives, many Chinese and Russian firms also receive substantial political support from their governments to invest abroad, especially in strategically important industries. On the firm‐level, the strength of firm‐specific resources is highlighted. BRIC country firms possess specific strengths that help them to enter both developing as well as developed countries and to pursue their internationalization strategy.

The aim of this study is to systematically analyze the determinants of FDI of firms from BRIC countries. While previous studies in this context are based on internationalization theories which were at least implicitly focused on FDI of firms from developed markets, the authors use a more emic approach and look for specific determinants of outward FDI of firms originating in BRIC countries.