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Book part
Publication date: 10 December 2018

Kai Jia, Martin Kenney and John Zysman

The recent emergence of Chinese digital platform firms, whose size rivals that of the US platform giants, has attracted much popular interest. Given the size and…

Abstract

The recent emergence of Chinese digital platform firms, whose size rivals that of the US platform giants, has attracted much popular interest. Given the size and increasing technical sophistication of these firms, there has been increasing interest in whether they have developed sufficient capacities and resources to become global-class competitors for the reigning US platform giants. The authors assembled a database of all overseas operations of the Chinese platform firms. Nine of them have foreign operations, with Tencent and Alibaba being the most important offshore investors. The authors describe the globalization patterns of these firms and analyze the strengths and obstacles to their globalization. Their globalization has proceeded on a number of vectors: first, these firms, with a few exceptions, when they have global strategies, have largely invested in firms with useful technology or content. One common strategy has been to follow Chinese customers abroad. Second, Chinese firms have made equity investments in a number of foreign Internet firms. And yet, in nearly all foreign markets, Chinese websites and apps still trail the US firms in market share and salience. Finally, Chinese investments are concentrated in proximate countries. Chinese platform firms, while having some state-of-the-art technologies, have a far smaller foreign presence than their US competitors do. Finally, the authors consider the implications of their research for discussions of whether emerging nation multinational firms require new theories for explaining their globalization.

Details

International Business in the Information and Digital Age
Type: Book
ISBN: 978-1-78756-326-1

Keywords

Article
Publication date: 29 January 2021

Ricardo Godinho Bilro and João Fortes da Cunha

This paper aims to explore the external factors that lead Western firms to fail in the Chinese market, proposing to reveal the main challenges they face in this market

Abstract

Purpose

This paper aims to explore the external factors that lead Western firms to fail in the Chinese market, proposing to reveal the main challenges they face in this market, such as culture, guanxi or others. Based on network theory, the authors propose to group failure attributes and actions to predict business failure.

Design/methodology/approach

Qualitative research based on in-depth interviews is conducted, with a sample of 21 individuals, from former/current managers that did or are currently doing business in China and a person from the Chinese Government. This research resorts to inductive reasoning and to Atlas.ti software to perform the analysis.

Findings

The findings reveal that it is possible to cluster seven distinct categories of external factors. Additionally, Chinese culture, local partnerships and the “catching-up effect” by Chinese firms are also external factors to be considered. The role of guanxi in China is changing, taking another format, and international companies in the Chinese market must take this into account.

Research limitations/implications

Several limitations arise in this research, such as information availability and time constraints, sample size and the characteristics of Chinese society (i.e. type of government). This study also proposes further confirmatory research to test the seven clusters proposed.

Practical implications

Managers can understand patterns of business failures when targeting the Chinese market and use the seven clusters as a tool to address this market appropriately in the future.

Originality/value

This paper intends to shed light on Western firms’ business failure in the Chinese market. The authors argue that several external factors linked to network surroundings contribute to Western firms failing in this market and that network failure attribution is still an understudied topic.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 14 no. 2
Type: Research Article
ISSN: 1754-4408

Keywords

Article
Publication date: 2 May 2017

Zia-ur-Rehman Rao, Muhammad Zubair Tauni, Amjad Iqbal and Muhammad Umar

The purpose of this paper is to find whether Chinese equity funds outperform the market and do Chinese fund managers possess positive market timing ability. This study…

Abstract

Purpose

The purpose of this paper is to find whether Chinese equity funds outperform the market and do Chinese fund managers possess positive market timing ability. This study also aims to investigate whether well-performing (worst) funds of last year continue to perform well (worst) in the following year.

Design/methodology/approach

Capital Asset Pricing Model and Carhart four-factor model are used for performance analysis, whereas for analyzing market timing ability, the Treynor and Mazuy (1966) and Henriksson and Merton (1981) models are applied. To investigate persistence in the performance of Chinese equity funds, all equity funds are divided, on the basis of performance in the past 12 months, into three equally weighted groups (high, middle and low) and then observed for next 12 months. After that, groups are again rebalanced according to their performance. This study uses a panel regression model for analysis.

Findings

Chinese equity funds are successful in providing higher than market returns, and fund managers possess positive market timing ability. The authors find that Chinese equity funds do not show persistence in performance as witnessed in developed markets. Well-performing funds (worst funds) of last year do not continue to provide higher (lower) return in the following year. Moreover, the authors detect positive relationship of fund size, age and expense ratio with the fund’s performance. Overall results suggest that emerging market equity funds show better performance than that of developed markets.

Practical implications

Investors are better off if they invest in equity funds instead of index funds, as results illustrate that equity funds outperformed the market. Further, the strategy of buying well-performing funds of last year and selling poorly performing funds of last year does not look very attractive in China. This study helps investors to understand the Chinese managed funds industry, and such an understanding is also helpful for fund managers and asset management companies who use performance information in marketing strategies.

Originality/value

This is the first study to investigate the performance persistence in Chinese equity funds and also contributes to the literature about the performance and market timing ability of equity funds. The study takes the sample of 520 equity funds for the period from 2004 to 2014, which includes a period of financial crisis of 2008.

Details

Journal of Asia Business Studies, vol. 11 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 18 September 2019

Mouna Abdelhedi and Mouna Boujelbène-Abbes

The purpose of this paper is to empirically investigate the volatility spillover between the Chinese stock market, investor’s sentiment and oil market, specifically during…

Abstract

Purpose

The purpose of this paper is to empirically investigate the volatility spillover between the Chinese stock market, investor’s sentiment and oil market, specifically during the 2014‒2016 turmoil period.

Design/methodology/approach

This study used the daily and monthly China market price index, oil-price index and composite index of Chinese investor’s sentiment. The authors first use the DCC GARCH model in order to study the correlation between variables. Second, the authors use a continuous wavelet decomposition technique so as to capture both time- and frequency-varying features of co-movement variables. Finally, the authors examine the spillover effects by estimating the BEKK GARCH model.

Findings

The wavelet coherency results indicate a substantial co-movement between oil and Chinese stock markets in the periods of high volatility. BEKK GARCH model outcomes confirm this relation and report the noteworthy bidirectional transmission of volatility between oil market shocks and the Chinese investor’s sentiment, chiefly in the crisis period. These results support the behavioral theory of contagion and highlight that the Chinese investor’s sentiment is a channel through which shocks are transmitted between the oil and Chinese equity markets. Thus, these results are important for Chinese authorities that should monitor the investor’s sentiment to better control the interaction between financial and real markets.

Originality/value

This study makes three major contributions to the existing literature. First, it pays attention to the recent 2015 Chinese stock market bumble. Second, it has gone some way toward enhancing our understanding of the volatility spillover between the investor’s sentiment, investor’s sentiment variation, oil prices and stock market returns (variables of interest) during oil and stock market crises. Third, it uses the continuous wavelet decomposition technique since it reveals the linkage between variables of interest at different time horizons.

Details

International Journal of Emerging Markets, vol. 15 no. 2
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 18 October 2019

Man Chen, Xiaomin Han, Xinguo Zhang and Feng Wang

The motion picture industry is a cultural and creative industry. Unlike its US counterpart, the Chinese motion picture industry is still developing. Therefore, learning…

Abstract

Purpose

The motion picture industry is a cultural and creative industry. Unlike its US counterpart, the Chinese motion picture industry is still developing. Therefore, learning from the US market, the purpose of this paper is to analyze the business model of Chinese movies from the perspective of new product diffusion.

Design/methodology/approach

Based on 66 movies released in the US and 21 movies released in China, this paper first compares the diffusion curves of Chinese and US movies through the movie life cycle and box office trends. Next, it analyzes the moviegoing behaviors of Chinese and US audiences based on the innovation and imitation coefficients in the Bass model. Finally, it compares the attention to information of Chinese and US audiences from the perspective of interpersonal word-of-mouth (WOM).

Findings

In the USA, a movie’s highest weekly box office is usually in its opening week, followed by a weekly decline in revenue; in China, there is no difference in box office performance between the first two weeks, but a weekly decline in revenue similarly follows. US audiences pay more attention to advertisements for movies than WOM recommendations, while Chinese people pay more attention to WOM recommendations. Neither the Chinese nor the US market differs in the volume of WOM between the first week before release and the opening week, and these two weeks are the most active period of WOM in both markets.

Practical implications

During the production phase for Chinese movies, we should satisfy opinion leaders’ needs. During the distribution phase, we should not only focus on market spending before the movie’s release, but also increase market spending in the opening week. During the theater release phase, we should stimulate WOM communication between moviegoers and thereby attract many more opinion seekers.

Originality/value

Few studies have investigated the Chinese motion picture industry from the perspective of new products. This paper compares and analyzes the diffusion of Chinese and US movies using the Bass model of new product diffusion, providing systematic theoretical guidelines for the commercial operation of the Chinese motion picture industry.

Details

Journal of Contemporary Marketing Science, vol. 2 no. 3
Type: Research Article
ISSN: 2516-7480

Keywords

Article
Publication date: 7 October 2014

Syed H. Akhter and Marcilio Machado

The purpose of this paper is to explore, using the conceptual frameworks of psychic distance and resource-based view, how Brazilian firms resolve strategic dilemma…

Abstract

Purpose

The purpose of this paper is to explore, using the conceptual frameworks of psychic distance and resource-based view, how Brazilian firms resolve strategic dilemma. Brazilian firms face a strategic dilemma about whether to diversify and exploit the rapidly growing markets of China or to protect and expand the established markets of the Greater Mercosur region. The strategic responses of Brazilian business to business firms are examined within the context of internationalization decisions.

Design/methodology/approach

The paper takes a qualitative approach to study the decisions taken by Brazilian firms to deal with the strategic dilemma arising from competitive developments in domestic and regional markets.

Findings

Findings support four hypotheses based on the psychic distance and resource-based view frameworks. However, the fifth hypothesis that trust would be an impediment for establishing business in China for Brazilian firms was not supported. Trust did not appear as a concern for Brazilian businesses.

Practical implications

Two practical implications can be drawn from the findings. First, Brazilian firms have to consider whether they have made themselves vulnerable to attacks from Chinese firms in the Greater Mercosur region by not aggressively entering the Chinese markets. Second, they also have to understand whether their lack of strong presence in the Chinese markets has resulted not only in lost opportunities but also in making it difficult for them to enter the market later.

Originality/value

The paper takes a multi-theoretical approach to provide insights into the international business expansion decisions of firms in a major economy in the Greater Mercosur region. It contributes to the growing literature on firms in emerging economies. By adopting a qualitative approach to study the research questions, the paper provides insights into the behaviors of firms confronting strategic tradeoffs.

Details

European Business Review, vol. 26 no. 6
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 1 May 2006

Paul Hong, Jungbae Noh and Woosang Hwang

The purpose of this paper is to develop an understanding of changing business control patterns that may be critical for firms, in order to manage effective enterprise…

9044

Abstract

Purpose

The purpose of this paper is to develop an understanding of changing business control patterns that may be critical for firms, in order to manage effective enterprise information infrastructures in and through the Chinese market.

Design/methodology/approach

This paper presents a typology that shows four types of Chinese market penetration and development, in terms of level of foreign management control and level of foreign ownership control. The model is illustrated through case examples of US, Korean, and Chinese firms.

Findings

The paper shows that sustainable design and management of enterprise information infrastructures require continuous awareness of changes in corporate management and ownership control.

Research limitations/implications

The transition paths among the four different types of global operations provide a rich basis for further theory development in the areas of the global supply chain practices beyond the Chinese market. Future research is needed to identify key variables that define the level of management and ownership control.

Practical implications

The typology and transitions paths presented in this paper may be a valuable road‐map for firms that are considering the Chinese market. In the course of implementing global supply chain strategies, foreign firms operating in China face complex business challenges, including multiple performance requirements, environmental regulations and cultural differences. In designing and managing effective enterprise information infrastructures, firms need to be conscious of both internal and external changes related to their management and ownership control. An understanding of changing business control patterns is critical if firms are to sustain effective enterprise information infrastructures in and through the Chinese market.

Originality/value

China is a potential global supply chain base. Global firms must consider carefully the extent of foreign management and ownership control with which they enter the Chinese market. These two dimensions are useful in analyzing the behavior and strategic options of global firms in this market.

Details

Journal of Enterprise Information Management, vol. 19 no. 3
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 15 November 2011

Yi‐Long Jaw, Ru‐Yu Wang and Carol Ying‐Yu Hsu

Although the concept of branding has been considered extensively in products and services, branding in Chinese is a relatively emerging phenomenon. This paper aims to…

1471

Abstract

Purpose

Although the concept of branding has been considered extensively in products and services, branding in Chinese is a relatively emerging phenomenon. This paper aims to present the enlivenment of branding in Chinese within the cross‐strait markets of Taiwan and Mainland China, which underlies various ideologies.

Design/methodology/approach

This study primarily reviews literatures of brand and brand name translation, defines the essentiality of brand naming, and outlines the branding strategies for entering cross‐strait markets. Furthermore, this study validates the using of substantially interpreted brands that support the authors' four developed propositions.

Findings

This study compares substantially interpreted brands in cross‐strait markets with a reference to commonly used translation methods. The results illustrate interesting ideologies among cross‐strait markets and can help managers achieve global brand recognition.

Research limitations/implications

Since China and Taiwan share the same Chinese culture, the qualitative method proposed by the present authors is more applicable to practitioners who are eager to pursue branding in cross‐strait markets. Thus, the relevant techniques may not be applicable to people less familiar with Chinese culture.

Practical implications

The qualitative case study provides an advisable method for branding in Chinese. The results of this study can provide greater understanding of the various ideologies in cross‐strait markets, as well as help managers achieve global brand recognition.

Originality/value

The various ideologies from branding is complex, especially for those involved with linguistic essentials. Previous research has mainly focused on managerial‐based branding and customer‐based branding. This paper extends the interest into enlivening inspirations.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 23 no. 5
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 1 March 2011

Feng Lu and Ling Mu

The purpose of this paper is to explore the strategy for latecomers in large developing countries under globalization. The relationship between innovation and learning is…

1403

Abstract

Purpose

The purpose of this paper is to explore the strategy for latecomers in large developing countries under globalization. The relationship between innovation and learning is deeply studied.

Design/methodology/approach

The paper formulates an in‐depth case study on the digital video player industry through consideration of government documents, reports, and research papers; intensive interviews; and questionnaire study.

Findings

The firms in developing countries might be able to innovate before they can match the firms in advanced countries in technological capabilities, and innovation is the most effective way of learning. The firms can achieve competitive advantage owing to the effect of the national value network, the nature of architectural technology, and the relationships between them in product development. The national market should be deliberately taken as a strategic asset for the technological learning and latecomers should learn how to exploit the advantage of globalization.

Originality/value

The paper tries to understand how firms in developing countries conduct learning by innovating to build their competitive advantages.

Details

Journal of Science and Technology Policy in China, vol. 2 no. 1
Type: Research Article
ISSN: 1758-552X

Keywords

Article
Publication date: 10 May 2022

Tamás Mizik and Jeremiás Máté Balogh

The study aims to give an overview of the development of the Chinese wine industry and trade between 1992 and 2019. Its importance is highlighted by the fact that China…

Abstract

Purpose

The study aims to give an overview of the development of the Chinese wine industry and trade between 1992 and 2019. Its importance is highlighted by the fact that China has become one of the world’s largest wine-consuming markets with great growth potential and is now ranked among the top 10 largest global markets for wine.

Design/methodology/approach

To address Chinese wine industry competitiveness, revealed comparative advantage (RCA), relative trade advantage (RTA) and revealed competitiveness (RC) were calculated, based on the World Bank World Integrated Trade Solution database. Chinese wine market-related issues are analyzed by Porter’s Five Forces in help of Market Line industry profile reports.

Findings

Results suggest that the Chinese wine market is relatively fragmented, with a concentrated food and beverages retail industry, strong buyer power and a moderate supplier power. The RCA calculated for the Chinese wine trade indicates that the share of exported bottled wine has become significant in the analyzed period. However, the RCA was perceivable just for bottled wines and only in the last analyzed period (2013–2019), whereas RTA and RC were negative for all periods revealing a comparative disadvantage. However, current market trends suggest that they will increase in the future.

Research limitations/implications

Data accuracy may affect these results because wine statistics may contain mislabeling. Moreover, China expanded its investments in many well-known wine regions all over the world, especially in Bordeaux, France. These, along with the significant re-export, could make it harder to interpret wine trade data because some part of the export is related to Chinese wineries outside of China.

Practical implications

Knowing the above-mentioned limitations, results should be interpreted with caution. However, high-quality wines can be identified as a niche market in China.

Originality/value

The study provided a detailed analysis of the Chinese wine industry and its competitiveness.

Details

International Journal of Wine Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1751-1062

Keywords

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