Tracing paths to internationalisation: historical trajectories, ownership advantages and outward FDIs from Shanghai and Shenzhen

This research argues that the historical trajectories of city-regions shape patterns of outward foreign direct investments (OFDIs) by influencing city-level ownership advantages. Drawing on Dunning’s ownership-location-internalisation (OLI) paradigm and an evolutionary economic geography perspective, we examine how these dynamics unfold in two major Chinese cities – Shanghai and Shenzhen. Our analysis shows that city-level attributes – industrial structure, institutional contexts, and technological and knowledge bases – determine ownership advantages. These advantages, in turn, affect OFDI choices about host economies, target sectors, and motives of internationalisation.