From Micro Differences to FDI Strategies: How Chinese SOE and POE Managers Shape Foreign Entry Decisions

This paper applies a micro-foundations approach to examine how risk propensities differ between state‑owned (SOE) and privately owned (POE) enterprise managers during foreign direct investment (FDI) decisions. Using evidence from China, we summarize contrasts in career paths, political ties, and incentive horizons that shape managerial cognition and risk perception. We then categorize risk tolerance through two lenses: past experiences and future expectations, showing that incorporating these micro factors aids us in analyzing FDI strategies more accurately than firm- and country-level factors alone. Building on this insight, we propose practical mechanisms for incentive design, project matching, and tenure management, and outline a future research agenda applying the same micro lens to investigate SOE and POE global strategies.