Does China’s direct investment in ASEAN have institutional preference from the perspective of investment motivation heterogeneity?

Location choice for outward foreign direct investment (OFDI) is key to companies' strategic decision-making on internationalization. We provide a comprehensive framework for Chinese companies selecting OFDI locations based on an eclectic (OLI) paradigm and neo-institutional economics. We reveal that investment motivation and host country's quality of institutions and bilateral institutional distance play interactive, complex roles in China's location choice for direct investment in ASEAN. Chinese companies prefer investing in ASEAN countries with better institutional quality, especially higher political stability, absence of violence/terrorism, government regulatory quality, and rule of law. Institutional quality significantly promotes market-seeking, efficiency-seeking, and resource-seeking investments; among institutional quality factors, rule of law and corruption control significantly promote market-seeking, resource-seeking, and efficiency-seeking investments, while regulatory quality and government effectiveness significantly promote market-seeking and efficiency-seeking investment. The better the host country's institutional quality, the more attractive it is for market-seeking and efficiency-seeking investments, but less for resource-seeking investments.