Knowledge Seeking and Outward FDI of Emerging Market Firms: The Moderating Effect of Inward FDI

This study examines whether a host country's industry‐specific technology advantage increases the propensity of emerging market multinational enterprises ( EMNEs ) to invest in the host country. The study further explores whether inward FDI in EMNEs ' home markets, by generating knowledge spillovers in the relevant industries, decreases EMNEs ' propensity to invest overseas for knowledge seeking. We test our arguments using a longitudinal data set of the overseas investment activities of C hinese manufacturing firms. We find support for our hypotheses after controlling for other important outward FDI motives. We discuss the implications of our results for research and practice.