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Article
Publication date: 1 June 2010

Xiaohua Lin

The purpose of this paper is to develop initial conceptualizations on two types of Chinese multinational corporations (MNCs), that is, state‐ and privated‐owned MNCs, in…

Abstract

Purpose

The purpose of this paper is to develop initial conceptualizations on two types of Chinese multinational corporations (MNCs), that is, state‐ and privated‐owned MNCs, in terms of internationalization motivation, entry strategy, and managerial capabilities.

Design/methodology/approach

This is a conceptual paper. Existing case studies are cited as illustrations.

Findings

Compared to Chinese private MNCs, state MNCs are more likely to be driven by internationalization motives that are not based on economic rationality, to adopt an integrated entry strategy, but less likely to contain dynamic capabilities necessary for competing internationally. In the short run, Chinese private MNCs should outperform their state counterparts, which however does not necessarily translate into better survival rate.

Research limitations/implications

The conceptualizations advanced in this paper should be tested empirically in future studies.

Practical implications

Given the differences between state and private Chinese MNCs, it would be a mistake for Western governments and the private sector to treat all Chinese MNCs as equals. Particularly, the concern about the private Chinese firms should place more emphasis on their capabilities to compete and collaborate as autonomous economic entities.

Originality/value

While much research attention has been given to “Chinese MNCs,” the author makes a distinction between state versus private MNCs from China and compares the two types with regards to internationalization motives, entry strategy, managerial capabilities, and performance potentials.

Details

International Marketing Review, vol. 27 no. 3
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 20 April 2015

Lin Yuan and Nitin Pangarkar

The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically…

Abstract

Purpose

The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically, the authors examine the individual and joint effects of speed of internationalization in developed and developing countries and age on Chinese MNCs’ performance.

Design/methodology/approach

The authors constructed a unique and comprehensive database on the internationalization strategies of 206 Chinese firms over 14 years and deployed random-effect regressions to assess the effects of age, speed of expansion in terms of number of subsidiaries and countries, and the types of destination (developed vs developing country) on firm performance.

Findings

The analyses show that age is negatively related to performance but rapid expansion of subsidiaries in developing countries and geographic scope in developed countries are positively related to performance. In addition, the impacts of young age and two types of expansion, fast expansion of subsidiaries in developing countries and fast expansion of geographic scope in developed countries, are cumulative.

Originality/value

The authors combine the arguments of the learning advantages of newness and fast movers and model the simultaneous effects of age and speed of two types of international expansion (in terms of number of subsidiaries and countries) in both developed and developing countries on performance. The strong empirical support for the hypotheses based on analyses of a unique data set of Chinese MNCs’ internationalization patterns lends credence to the proposed model.

Details

International Journal of Emerging Markets, vol. 10 no. 2
Type: Research Article
ISSN: 1746-8809

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Book part
Publication date: 19 November 2019

Weihao Li, Ying Chen and J. Ryan Lamare

This chapter aims to answer whether foreign multinational corporations (MNCs) operating within the Chinese context differ from indigenous firms on several essential labor…

Abstract

This chapter aims to answer whether foreign multinational corporations (MNCs) operating within the Chinese context differ from indigenous firms on several essential labor standards indicators: white- and blue-collar salaries, pension insurance, and working hours. In drawing upon neo-institutional and organizational imprinting theories and applying these to the Chinese context, the study addresses competing arguments regarding the expected effects of ownership type on these indicators. We employ seemingly unrelated regressions (SURs) to empirically examine a novel national survey of 1,268 firms in 12 Chinese cities. The regression results show that foreign MNCs do not provide uniquely beneficial labor practice packages to workers when compared with various indigenous firm types, including state-owned enterprises (SOEs), affiliate businesses of Hong Kong, Macau, and Taiwan, and domestic private enterprises (DPEs). Specifically, although MNCs provide relatively higher wage rates, they underperform relative to SOEs concerning social insurance. However, DPEs consistently underperform relative to MNCs across most indicators. The mixture of the results contributes important nuances to the application of neo-institutional and organizational imprinting theories to the Chinese context.

Details

Advances in Industrial and Labor Relations
Type: Book
ISBN: 978-1-83909-192-6

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Article
Publication date: 29 November 2018

Dirk Holtbrügge

Chinese outward foreign direct investment (OFDI) often causes negative public responses, particularly in western industrialized countries. An important instrument of…

Abstract

Purpose

Chinese outward foreign direct investment (OFDI) often causes negative public responses, particularly in western industrialized countries. An important instrument of Chinese multinational corporations (MNCs) to overcome these concerns is the use of political strategies. The paper aims to discuss these issues.

Design/methodology/approach

Based on institutionalist theory, the author formulates research hypotheses and tests them with a sample of 611 subsidiaries of Chinese MNCs in Germany.

Findings

The study shows that CEO political connection is positively associated with the use of the information and financial incentives strategies, while state ownership influences the use of the financial incentives and reputation-building strategies. Also, moderating effects of subsidiary age on these three political strategies are revealed.

Originality/value

The author derives implications for the literature on corporate political strategies as well as for research on Chinese OFDI, institutional theory and international management theory.

Details

International Journal of Emerging Markets, vol. 13 no. 6
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 1 September 2004

Jie Shen

Since most literature on international performance appraisal is derived from Western MNCs, it is questionable whether the Western theories are equally powerful when…

Abstract

Since most literature on international performance appraisal is derived from Western MNCs, it is questionable whether the Western theories are equally powerful when applied to other national contexts. This study develops the Chinese international performance appraisal model by exploring performance appraisal policies and practices and the associated factors in Chinese MNCs. It reveals that Chinese MNCs adopt different approaches towards different groups, particularly different nationalities and managerial status. The Chinese international performance appraisals are a mix of home and local appraisal systems, and a mix of traditional Chinese personnel management and modern Western HRM concepts. Moreover, Chinese international performance appraisal policies and practices are affected by various host‐contextual and firm‐specific factors, and there is also an interplay between international performance and other international human resource management activities.

Details

International Journal of Manpower, vol. 25 no. 6
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 June 2010

Lin Yuan and Nitin Pangarkar

The purpose of this paper is to examine the determinants of foreign direct investment location – specifically whether firms enter a particular market or not. Drawing from…

Abstract

Purpose

The purpose of this paper is to examine the determinants of foreign direct investment location – specifically whether firms enter a particular market or not. Drawing from the ecology and institutional theories, the paper identifies firms' own past (behavioral inertia) and rivals' past choices (behavioral mimicry) as key determinants of location selection. The paper identifies the differences between developing country multinationals (MNCs) and developed country MNCs and their (differences)' implications for the relative influence of mimetic versus inertial forces.

Design/methodology/approach

A unique and comprehensive database about the location choices of 204 Chinese firms between 1992 and 2005 was constructed and conditional logistic regressions were deployed to assess the direct effects of behavioral inertia/mimicry, and the moderating effect of host country environment, on the location choices of the sampled firms.

Findings

The paper finds that behavioral inertia has a stronger impact on the location decisions of Chinese MNCs than behavioral mimicry. It also finds that the host country's institutions, openness, and policy stability moderate the relationship between behavioral mimicry and inertia, on one hand, and location choice, on the other hand, possibly because of these factors' influence on the level of perceived uncertainty.

Originality/value

This is the first paper modeling the simultaneous effects of behavioral inertia and mimicry on location choice and the moderating effect of host country environment on these relationships. The strong empirical support for all the predictions lends credence to the conceptual foundations of the hypothesized relationships. The focus on developing country MNCs, which possess several distinctive characteristics, and the unique dataset, should also enhance the paper's appeal.

Details

International Marketing Review, vol. 27 no. 3
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 23 February 2010

Torsten Kühlmann and Kate Hutchings

The purpose of this paper is to explore the specific difficulties that senior managers face when employing expatriate, Chinese and local‐hired foreign managers in…

Abstract

Purpose

The purpose of this paper is to explore the specific difficulties that senior managers face when employing expatriate, Chinese and local‐hired foreign managers in China‐based subsidiaries of Western multinational companies (MNCs). Furthermore, it aims to examine the resultant coping strategies to overcome identified weaknesses.

Design/methodology/approach

This research adopts a qualitative approach, using semi‐structured interviews with key‐informants from senior management in 44 Australian and German companies operating in China.

Findings

The study identified specific difficulties associated with the employment of expatriate, local Chinese, and local‐hired foreign managers in Australian and German subsidiaries in China. The interviewees indicate a widespread intention to replace expatriate managers with Chinese managers and local‐hired foreign managers. The striving for localization of staffing is more pronounced in German than Australian MNCs. German companies offer more comprehensive development activities for the Chinese talent than Australian companies.

Research limitations/implications

The small number of participants and the restriction to one key informant per company limit the generalizability of the findings. The effects of different staffing options still need to be researched in longitudinal studies and in varied contexts.

Practical implications

Localization of staff suggests the need for specific, culture‐sensitive approaches to personnel development. The findings also suggest that the knowledge transfer between expatriate and local managers deserves more attention. Finally, the return on investment that companies receive from differing staffing options should be assessed using a multidimensional set of success criteria.

Originality/value

This paper has two main contributions to existing research. First, it links academic discussion about the options of international staffing with the experience of practitioners from Western MNCs operating in China. Second, it provides further support for the existence of country‐of‐origin effects in international staffing.

Details

Career Development International, vol. 15 no. 1
Type: Research Article
ISSN: 1362-0436

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Article
Publication date: 1 May 1999

Haishun Sun

The economic boom and liberalization make China a new focus of international investments by multinational corporations (MNCs). How to enter this huge market and what entry…

Abstract

The economic boom and liberalization make China a new focus of international investments by multinational corporations (MNCs). How to enter this huge market and what entry mode should be taken, remain inconclusive. This paper is a study of the entry modes of MNCs into China from socioeconomic perspectives. It provides a theoretical discussion and also an empirical investigation of MNCs’ entry modes in the Chinese particular institutional and business environments. It examines the impact of sociocultural differences, the technology intensity of investment projects and regional factors on MNCs’ entry mode choice.

Details

International Journal of Social Economics, vol. 26 no. 5
Type: Research Article
ISSN: 0306-8293

Keywords

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Book part
Publication date: 16 November 2012

Nimet Uray, Nukhet Vardar and Ramazan Nacar

Purpose – The main aim of this chapter is to identify the factors that motivate outward Foreign Direct Investment (FDI) from Turkey to EU countries, looking into the…

Abstract

Purpose – The main aim of this chapter is to identify the factors that motivate outward Foreign Direct Investment (FDI) from Turkey to EU countries, looking into the problem at the firm level with a marketing focus, trying to understand whether or not there are any Turkey-specific prevailing marketing-related drivers.

Design/methodology/approach – With a distinction between developed and emerging/developing countries and their MNCs’ role in world trade and FDI, the literature review focuses on micro-view motives, particularly marketing-related ones, rather than macro-view motives which are mostly studied in the literature. Based on the literature review, the importance of Turkish MNCs and their increasing role in the world trade is briefly summarized.

Looking into the problem at the firm level with a marketing focus, a series of in-depth interviews with top executives were conducted as an exploratory study in order to explore and understand the role of marketing-related motives in Outward Foreign Direct Investment (OFDI) decisions of Turkish MNCs. For this purpose, 10 in-depth interviews with 13 top executives were conducted with tailor-made questionnaires.

Findings – The analysis of interviews revealed some different OFDI drivers and motivations for the Turkish MNCs compared to the factors mentioned in the literature, as well as iterating some common motives with the OFDI literature. Parallel to the FDI literature, it is observed that the Turkish MNCs mainly started their internationalization attempts by taking somewhat less risky and smaller steps.

As a result of qualitative research, the support is provided for the theoretical perspective that micro variables are more important than macro variables for Emerging Multinationals (EMNCs), particularly for Turkish MNCs; therefore, some Turkey-specific motives were also identified.

Originality/value of chapter – Although there is a consensus in recent literature on the most persistent group of motives influencing OFDI activities of EMNCs in developed countries, the underlying marketing-related objectives which are crucial to sustain competitive advantage have not been analysed and investigated sufficiently. This study is an attempt to fill this gap by identifying the most persistent marketing-related motives and give important insights about country-specific ones encouraging Turkish EMNCs to carry out OFDI in EU.

Details

New Policy Challenges for European Multinationals
Type: Book
ISBN: 978-1-78190-020-8

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Article
Publication date: 6 June 2016

Karen Schonfelder, S. Ramakrishna Velamuri and Wilson Liu

The purpose of this study is to explore the regulatory framework in China and the extent to which Chinese multinationals have implemented and disclosed their anti-bribery…

Abstract

Purpose

The purpose of this study is to explore the regulatory framework in China and the extent to which Chinese multinationals have implemented and disclosed their anti-bribery and corruption (ABC) compliance practices. This is done against the backdrop of the evolving international ABC compliance standards.

Design/methodology/approach

This study is based on detailed reviews of the ABC compliance standards of international organizations; legislation passed by the USA, the UK and Chinese Governments; seven semi-structured interviews with leading experts in the field; and comparisons of ABC program disclosures of four Chinese with four best-in-class western multinational corporations.

Findings

A high level of convergence was found in the ABC standards published by the international organizations. Several positive features were found in the Chinese ABC regulatory frameworks but our findings indicate that there is minimal disclosure around ABC compliance program practices. This paper shows that a transparent disclosure would represent an easy win for Chinese multinational corporations and contribute to raising their reputations internationally.

Research limitations/implications

While there are numerous studies in the law literature on ABC compliance standards and the extent to which they are effective in achieving their objectives, this is an emergent area in management research, to which our study makes a contribution. Future research could explore how other emerging economies are tackling this important issue.

Practical implications

By proactively adopting ABC compliance practices, corporations can seize the ethical high ground and build solid reputations with their stakeholders.

Originality/value

It is believed that this study is the first academic study that compares Chinese and international ABC standards.

Details

Corporate Governance, vol. 16 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

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