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1 – 10 of over 2000Feng Wan, Peter Williamson and Naresh Pandit
Chinese firms are winning market share from foreign multinational enterprises in domestic markets. The international business literature suggests that this is happening because…
Abstract
Purpose
Chinese firms are winning market share from foreign multinational enterprises in domestic markets. The international business literature suggests that this is happening because these firms are developing non-traditional firm-specific advantages (FSAs). Strategic factor market (SFM) theory provides a good basis for explaining how this is happening. However, it is underdeveloped in terms of analysing unique resources and unique access to those resources by Chinese firms in their domestic markets. This paper aims to develop a framework to understand how Chinese firms have developed non-traditional FSAs.
Design/methodology/approach
The case study method is adopted to explore how Chinese firms develop non-traditional FSAs. Specifically, the authors compare paired case studies of a Chinese firm and a foreign multinational in each of two industries.
Findings
The authors find that Chinese firms have developed non-traditional FSAs because of more relevant experience, better adapted strategies and privileged relationships. This has enabled Chinese firms to develop non-traditional FSAs.
Originality/value
The authors propose a framework that conceptualises non-traditional FSA development in Chinese firms as a product of superior access to unique and valuable resources in their domestic SFMs.
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Hanyang Ma, Jingjie Zou and Hailiang Zou
This study aims to explore the internationalization of multinational enterprises (MNEs) from China and aims to examine the relationship between Chinese MNEs’ duration of…
Abstract
Purpose
This study aims to explore the internationalization of multinational enterprises (MNEs) from China and aims to examine the relationship between Chinese MNEs’ duration of internationalization and export intensity, and the contingent roles of the home country government.
Design/methodology/approach
By extending the springboard theory with institutional and cost-benefit analyses, the authors elaborate a two-phase framework of internationalization to explain how Chinese MNEs develop their international business under the influences of the home country government. Furthermore, the authors apply the Heckman two-stage method based on a panel data set of 19,994 firm-year observations of Chinese listed firms in 2008–2018 to test the hypotheses.
Findings
The research findings demonstrate an inverted U-shape relationship between the duration of internationalization and the export intensity of MNEs from China. The export intensity of MNEs from China increases during the initial phase of internationalization, and decreases during the subsequent. A further study reveals that the inverted U-shape of Chinese non-SOEs is steeper than that of SOEs, and this moderating effect is more salient after the Belt and Road Initiative. These results highlight the influence of the home government through state ownership and policies on the inverted U-shaped relationship.
Originality/value
This study helps to refine the understanding of Chinese MNEs’ global expansion by addressing time as an explicit dimension and revealing the mechanism of state ownership and the home country governmental policy in the dynamic internationalization process.
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Lala Hu, Marta Galli and Roberta Sebastiani
The Chinese market represents an increasingly popular destination for wine firms and recent opportunities derive from the growth of e-commerce. The aim of this paper is to…
Abstract
Purpose
The Chinese market represents an increasingly popular destination for wine firms and recent opportunities derive from the growth of e-commerce. The aim of this paper is to understand the impact of digital platforms on wine firms' internationalisation in China by adopting the service ecosystems approach.
Design/methodology/approach
The authors carried out a case study of Italian premium wine firms from the Valpolicella area by collecting 27 semi-structured interviews with key informants that operate at the micro-, meso- and macro-levels of the internationalisation ecosystem. Italian wine firms were selected as the focus of the analysis, given the recent sales growth of their products in the Chinese market.
Findings
Results show that digital platforms hold a key role in the wine firms' internationalisation in China, intervening with resource integration mechanisms, alignment to the cultural context and mediating firms' digital presence in the market. The platformisation dynamics also reveal the existence of enablers and constraints in the firm internationalisation through digital platforms.
Research limitations/implications
The authors aim to contribute to the marketing literature by analysing how digital platforms influence the wine firms' internationalisation in China through an original perspective, i.e. the service ecosystems lens.
Originality/value
The study adopts the service ecosystems approach to understand the internationalisation of wine firms in the Chinese market through digital platforms.
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Camillo Lento and Wing Him Yeung
This paper aims to explore the audit quality and fee implications of joining a global accounting firm network and association (“AF N&A”).
Abstract
Purpose
This paper aims to explore the audit quality and fee implications of joining a global accounting firm network and association (“AF N&A”).
Design/methodology/approach
A hand-collected sample focusing upon the pre- and post-periods around the time when an independent audit firm joins an AF N&A is developed. A propensity score-matched sample is created to address the endogeneity and self-selection bias. OLS regression is used on a sample of around 2,000 firm-year observations from 2003 to 2014.
Findings
Membership with an AF N&A is associated with higher levels of audit quality and audit fees. Furthermore, audit quality and fee increases are more pronounced for audit firms that become members of a larger, more formal AF N&A.
Originality/value
This paper provides additional insights into the conflicting results regarding the audit quality implications of membership with AF N&As in China. This paper also extends the discussion by exploring the audit quality and fee differentials among the non-Big Four AF N&As. These findings have significant implications for independent audit firms pursuing membership with an AF N&A and regulators seeking to reduce market concentration around the Big Four.
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Ruoyan Zhu, Yin Li and Li Tang
The purpose of the study is to propose a new perspective to explain how China's rapid growth in patenting is partially driven by corporate strategic patenting to influence local…
Abstract
Purpose
The purpose of the study is to propose a new perspective to explain how China's rapid growth in patenting is partially driven by corporate strategic patenting to influence local governments. The authors highlight the role of strategic patenting and local government-business relations in creating the gap between the patent boom and underlying technological progress in China.
Design/methodology/approach
The authors investigate the relationship between local government-business relations and corporate strategic patenting behaviors, measured as a higher ratio of patent filings to patent awards, by collecting data from three successive NADS surveys of government-business relations in 292 Chinese municipalities, paired with detailed patenting and subsidy data of 3,756 publicly listed corporations obtained through text mining.
Findings
The authors find that, while R&D investment and patent subsidies do drive corporate patenting, firms in jurisdictions with lower-quality government-business relations are more likely to engage in strategic patenting. Moreover, the negative impact of government-business relations on strategic patenting is moderated by political connections, as the strategic patenting of firms without political connections is more sensitive to government-business relations. The authors further show that firms obtain significant benefits from patenting in the form of additional subsidies from local innovation and industrial policies in the years following.
Social implications
Rolling back patent subsidies will reduce strategic patenting to a limited extent. The local governments in emerging markets need to increase the capacity to implement industrial policy and provide market-based opportunities for firms to access innovation inputs.
Originality/value
The authors provide an updated and fresh perspective to understand the phenomenon of China's patent boom by showing that patenting can be driven by corporate strategies to adapt to local institutions and influence government policy. The authors extend the analysis of strategic patenting to emerging markets.
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Ya’nan Zhang, Xuxu Li and Yiyi Su
This study aims to explore the extent to which Chinese multinational enterprises (MNEs) rely on supranational institution – the Belt and Road Initiative (BRI) – versus host…
Abstract
Purpose
This study aims to explore the extent to which Chinese multinational enterprises (MNEs) rely on supranational institution – the Belt and Road Initiative (BRI) – versus host country institutional quality to navigate their foreign location choice.
Design/methodology/approach
This study uses a conditional logit regression model using a sample of 1,302 greenfield investments by Chinese MNEs in 54 BRI participating countries during the period 2011–2018.
Findings
The results indicate that as a supranational institution, the BRI serves as a substitution mechanism to address the deficiencies in institutional quality in BRI participating countries, thereby attracting Chinese MNEs to invest in those countries. In addition, the BRI’s substitution effect on host country institutional quality is more pronounced for large MNEs, MNEs in the manufacturing industry and MNEs in inland regions.
Originality/value
This study expands the understanding of the BRI as a supranational institution for MNEs from emerging markets and reveals its substitution effect on the host country institutional quality. Furthermore, it highlights that MNEs with diverse characteristics gain varying degrees of benefits from the BRI.
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Zheng Li, Jun Li, Jin Chen and Tsvi Vinig
This is a special issue of Chinese Management Studies and this study aims to engage with debates on innovation in China and to provide new insights for innovation research in the…
Abstract
Purpose
This is a special issue of Chinese Management Studies and this study aims to engage with debates on innovation in China and to provide new insights for innovation research in the context of China, seeking to develop a greater understanding of the concept of “innovation with Chinese characteristics”.
Design/methodology/approach
This study reviews the Chinese innovation management literature in general and the selected papers in this special issue in particular and proposes two new directions for future research.
Findings
The nine papers that constitute this special issue present research on important aspects of innovation in China, ranging from the effectiveness of government subsidisation for innovation, the impact of fiscal decentralisation on innovation, the role of management behaviour in promoting (or discouraging) innovation and the effects of differing business models on innovation. These papers shed valuable new light on the theory and practice of innovation in China. The papers are discussed in the context of four primary arguments about innovation management in China identified from the broader literature in the field. These relate to the pattern of China’s innovation performance over time, the reasons for its effectiveness, the role of alliances and influences of indigenous factors. It is also shown that management of the internationalisation of innovation and of efficient internal innovation are two important directions for future research on Chinese innovation in an era of de-globalisation.
Originality/value
The studies presented here provide valuable contributions to theory building in innovation research, as well as some important ideas for directions of future research on innovation in China in the new era of de-globalisation.
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Ajid ur Rehman, Asad Yaqub, Tanveer Ahsan and Zia-ur-Rehman Rao
This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.
Abstract
Purpose
This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.
Design/methodology/approach
The study employs a dataset of 2,920 A-listed firms from Chinese stock exchanges of Shanghai and Shenzhen for the period of 2003–2019. We apply both univariate and panel regression analysis by using fixed effect estimation with robust standard errors.
Findings
Our findings reveal that firms misclassify revenues by taking advantage of the flexibility provided by applicable financial reporting standards. The empirical evidence obtained through regression analysis suggest that managers reclassify non-operating revenues as operating revenue to alter the economic reality while seeking the advantage of financial reports users’ vulnerability for valuing the upper half of income statement items more as compared to lower part. The results further indicate that international financial reporting standards adoption inhibits the earnings management practices using classification shifting of revenues. It is also concluded that firms, which are suffering losses or having low growth, are more persistently involved in misclassification of revenues.
Originality/value
The study is unique from the point of view that it investigates earnings management from the prospective of revenue’s classification in an emerging market characterized by various market imperfections such as lower investor protection and higher information asymmetry.
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Xin Huang, Ting Tang, Yu Ning Luo and Ren Wang
This study aims to examine the impact of board characteristics on firm performance while also exploring the influential mechanisms that help Chinese listed companies establish…
Abstract
Purpose
This study aims to examine the impact of board characteristics on firm performance while also exploring the influential mechanisms that help Chinese listed companies establish effective boards of directors and strengthen their corporate governance mechanisms.
Design/methodology/approach
This paper uses machine learning methods to investigate the predictive ability of the board of directors' characteristics on firm performance based on the data from Chinese A-share listed companies on the Shanghai and Shenzhen stock exchanges in China during 2008–2021. This study further analyzes board characteristics with relatively strong predictive ability and their predictive models on firm performance.
Findings
The results show that nonlinear machine learning methods are more effective than traditional linear models in analyzing the impact of board characteristics on Chinese firm performance. Among the series characteristics of the board of directors, the contribution ratio in prediction from directors compensation, director shareholding ratio, the average age of directors and directors' educational level are significant, and these characteristics have a roughly nonlinear correlation to the prediction of firm performance; the improvement of the predictive ability of board characteristics on firm performance in state-owned enterprises in China performs better than that in private enterprises.
Practical implications
The findings of this study provide valuable suggestions for enriching the theory of board governance, strengthening board construction and optimizing the effectiveness of board governance. Furthermore, these impacts can serve as a valuable reference for board construction and selection, aiding in the rational selection of boards to establish an efficient and high-performing board of directors.
Originality/value
The study findings unequivocally demonstrate the superiority of nonlinear machine learning approaches over traditional linear models in examining the relationship between board characteristics and firm performance in China. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. Within the suite of board characteristics, director compensation, shareholding ratio, average age and educational level are particularly noteworthy, consistently demonstrating strong, nonlinear associations with firm performance. The study reveals that the predictive performance of board attributes is generally more robust for state-owned enterprises in China in comparison to their counterparts in the private sector.
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Peng Xu, Mingfeng Tang, Jin Chen and Alexander Brem
China has climbed from 22nd in the Global Innovation Index Rankings in 2017 to 11th in the 2022 due to the transition of its manufacturing firms from assemblers to system…
Abstract
Purpose
China has climbed from 22nd in the Global Innovation Index Rankings in 2017 to 11th in the 2022 due to the transition of its manufacturing firms from assemblers to system integrators. This paper examines how firms can enhance their innovation capability through inbound and outbound open innovation.
Design/methodology/approach
This paper applies both open innovation and a knowledge-based view and proposes a conceptual framework that encompasses innovation capability and the significance of tacit knowledge acquisition. A questionnaire was designed to collect relevant data from 139 Chinese manufacturing firms in six regions to test this framework.
Findings
The authors found that inbound open innovation has a stronger impact than outbound open innovation on synergistic innovation capability. The acquisition of skill-based tacit knowledge has a slightly stronger intermediary role between open innovation (no matter inbound or outbound) and synergistic innovation capability than cognitive tacit knowledge does.
Practical implications
Firms should improve external tacit knowledge acquisition efforts to generate new knowledge, inspire the innovation passion of employees and implement ambidextrous open innovation.
Originality/value
This paper makes a good first step to analyze the effect of ambidextrous open innovation on the synergistic innovation capability of Chinese manufacturing firms. It verifies the role of skill-based and cognitive tacit knowledge acquisition and provides new reflections on open innovation strategy in emerging economies, thus enriching open innovation and knowledge-based theories.
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