Chinese multinationals: how do institutional factors affect their location patterns?
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Published
18-09-2018
Diego Quer Ramón
Enrique Claver Cortés
Laura Rienda García
Abstract
This paper analyses the impact of various host country institutional factors on the location patterns of 29 large Chinese multinationals. From a sample of 127 outward foreign direct investment (FDI) decisions made in 52 countries, our findings suggest that a greater difficulty in doing business and a high political risk in the host country do not discourage Chinese multinationals. However, the presence of overseas Chinese in the host country, a larger absolute host market size and a higher volume of Chinese exports to that country affect positively.
How to Cite
Quer Ramón, D., Claver Cortés, E., & Rienda García, L. (2018). Chinese multinationals: how do institutional factors affect their location patterns?. Cuadernos De Gestión, 11(2), 77–88. https://doi.org/10.5295/cdg.100216dq
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Keywords
Emerging-market multinationals, China, institutional factors, location patterns, foreign direct investment
References
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YOUNG, S.; HUANG, C.H. y MCDERMOTT, M. (1996): “Internationalization and competitive catch-up processes: Case study evidence on Chinese multinational enterprises”, Management International Review, Vol. 36, No. 4, pp. 295-314.
BUCKLEY, P,J.; CLEGG, L.J.; CROSS, A.R.; LIU, X.; VOSS, H. y ZHENG, P. (2007): “The determinants of Chinese foreign direct investment”, Journal of International Business Studies, Vol. 38, No. 4, pp. 499-518.
BUNYARATAVEJ, K. y HAHN, E.D. (2007): “Outward foreign direct investments from China: Theory and determinants”, AIB 2007 Annual Meeting, Indianapolis.
CHEN, H. y HU, M.Y. (2002): “An analysis of entry mode and its impact on performance”, International Business Review, Vol. 11, No. 2, pp. 193-210.
CHILD, J. y RODRIGUES, S.B. (2005): “The internationalization of Chinese firms: A case for theoretical extension?”, Management and Organization Review, Vol. 1, No. 3, pp. 381-410.
CUI, L. y JIANG, F. (2009): “FDI entry mode choice of Chinese firms: A strategic behavior perspective”, Journal of World Business, Vol. 44, No. 4, pp. 434-444.
CUI, L. y JIANG, F. (2010): “Behind ownership decision of Chinese outward FDI: Resources and institutions”, Asia Pacific Journal of Management, Vol. 27, Nº 4, pp. 751-774.
FORTUNE (2008): Fortune Global 500 (2008 edition), New York, Time Inc.’s Fortune/Money Group.
GARCÍA-CANAL, E. y GUILLÉN, M.F. (2008): “Risk and the strategy of foreign location choice in regulated industries”, Strategic Management Journal, Vol. 29, No. 10, pp. 1097-1115.
GLOBERMAN, S. y SHAPIRO, D. (2009): “Economic and strategic considerations surrounding Chinese FDI in the United States”, Asia Pacific Journal of Management, Vol. 26, No. 1, pp. 163-183.
HENISZ, W.J. (2003): “The power of the Buckley and Casson thesis: The ability to manage institutional idiosyncrasies”, Journal of International Business Studies, Vol. 34, No. 2, pp. 173-184.
HOFSTEDE, G. (1980): Culture´s consequences. International differences in work-related values, Newbury Park, Sage Publications.
HONG, E. y SUN, L. (2006): “Dynamics of internationalization and outward investment: Chinese corporations´ strategies”, The China Quarterly, No. 187, pp. 610-634.
JIMÉNEZ, A. y DURÁN, J.J. (2009): “La responsabilidad social de la empresa multinacional española frente al riesgo político de los países de destino: ¿Amenaza u oportunidad?”, Revista de Responsabilidad Social de la Empresa, No. 3, pp. 131-158.
KOGUT, B. y SINGH, H. (1988): “The effect of national culture on the choice of entry mode”, Journal of International Business Studies, Vol. 19, No. 3, pp. 411-432.
LUO, Y. y TUNG, R.L. (2007): “International expansion of emerging market enterprises: A springboard perspective”, Journal of International Business Studies, Vol. 38, No. 4, pp. 481-498.
MADHOK, A. (1997): “Cost, value and foreign market entry mode: The transaction and the firm”, Strategic Management Journal, Vol. 18, No. 1, pp. 39-61.
MALHOTRA, S. y ZHU, P.C. (2009): “Determinants and valuation impact of cross-border acquisitions by firms from China and India”, AIB 2009 Annual Meeting, San Diego.
MATHEWS, J.A. (2006): “Dragon multinationals: New players in 21st century globalization”, Asia Pacific Journal of Management, Vol. 23, No. 1, pp. 5-27.
MEYER, K.E.; ESTRIN, S.; BHAUMIK, S.K. y PENG, M.W. (2009): “Institutions, resources, and entry strategies in emerging economies”, Strategic Management Journal, Vol. 30, No. 1, pp. 61-80.
MOFCOM (2010): 2009 Statistical bulletin of China´s outward foreign direct investment, Beijing, Ministry of Commerce.
MOFCOM (2009): Total import & export value by country (region), Beijing, Ministry of Commerce.
MORCK, R.; YEUNG, B. y ZHAO, M. (2008): “Perspectives on China´s outward foreign direct investment”, Journal of International Business Studies, Vol. 39, No. 3, pp. 337-350.
OHIO UNIVERSITY (2009): Distribution of the ethnic Chinese population around the world, Ohio University Library and the Shao Center.
PANGARKAR, N. y YUAN, L. (2009): “Location in internationalization strategy: Determinants and consequences”, Multinational Business Review, Vol. 17, No. 2, pp. 37-68.
PENG, M.W.; WANG, D.Y.L. y JIANG, Y. (2008): “An institution-based view of international business strategy: A focus on emerging economies”, Journal of International Business Studies, Vol. 39, No. 5, pp. 920-936.
PRS (2009): International Country Risk Guide (ICRG), The Political Risk Services Group.
QUER, D.; CLAVER, E. y RIENDA, L. (2007): “Multinacionales chinas. El nuevo reto del escenario global”, Boletín Económico de ICE, No. 2925, pp. 11-24.
RUI, H. y YIP, G.S. (2008): “Foreign acquisitions by Chinese firms: A strategic intent perspective”, Journal of World Business, Vol. 43, No. 2, pp. 213-226.
UN STATISTICS DIVISION (2009): National accounts main aggregates database, United Nations Statistics Division.
UNCTAD (2010): World Investment Report 2010. Investing in a low-carbon economy, New York and Geneva, UNCTAD.
WORLD BANK (2008): Doing Business 2009, Washington, The World Bank.
YOUNG, S.; HUANG, C.H. y MCDERMOTT, M. (1996): “Internationalization and competitive catch-up processes: Case study evidence on Chinese multinational enterprises”, Management International Review, Vol. 36, No. 4, pp. 295-314.
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