Relational embeddedness in home-based network and dynamic capabilities: evidence from Chinese MNCs
ISSN: 1750-614X
Article publication date: 8 February 2021
Issue publication date: 15 March 2021
Abstract
Purpose
Prior studies have argued that multinational firms with dynamic capabilities can reconfigure and upgrade their internal and external resources and adapt to an ever-changing competitive global environment. The impact of home country networks exerting on multinational corporations’ (MNCs) dynamic capabilities has been rarely discussed in extant research. This paper aims to explore how two types of home country networks’ relational embeddedness (from domestic firms and foreign firms) affect Chinese MNCs’ dynamic capabilities.
Design/methodology/approach
Several hypotheses were tested by analyzing the survey data from 204 multinational companies in china.
Findings
The results reveal the impact mechanism of the home country network on dynamic capabilities. Embeddedness in domestic networks positively affects embeddedness in the foreign network; embeddedness in foreign firms exerts positive effects on the three dimensions of MNC’s dynamic capabilities. Additionally, the effect of domestic firms’ relational embeddedness on resource reconfiguring capability is mediated by foreign firms’ embeddedness. Consequently, this study provides a theoretical introduction for MNCs from emerging economies.
Practical implications
This study has several managerial implications for emerging MNCs’ international operations. For MNCs from emerging economies, close cooperation with domestic firms helps firms to develop a close relationship with foreign firms; meanwhile, developing a close relationship with foreign firms can obtain spillover about technology and management experience better, improving dynamic capability. Specifically, domestic embeddedness, through foreign embeddedness, can extend the impact to focal firms in developing resource reconfiguring capability.
Originality/value
This study provides an alternate view of how home country networks influence the dynamic capabilities of Chinese MNCs and outlines its impact mechanism. Therefore, the study contributes both to the international business literature and social network literature.
Keywords
Acknowledgements
National Natural Science Foundation of China.
71672176.
71832013.
Citation
Du, J., Lu, K. and Zhou, C. (2021), "Relational embeddedness in home-based network and dynamic capabilities: evidence from Chinese MNCs", Chinese Management Studies, Vol. 15 No. 1, pp. 222-242. https://doi.org/10.1108/CMS-03-2020-0095
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited