Friday, July 14, 2017

Competitors at Home, Collaborators Abroad: Chinese Multinationals go Global

Though some emerging market multinationals, such as Lenovo or Tata, have already grown into leaders on the world stage, many are still in the early stages of learning how to cope with the challenges of the global marketplace. While their home markets often lack adequate technology, finance systems, and internationally-experienced talents, these enterprises can often upgrade their capabilities through acquisitions and R&D investment. But do they also derive some benefits from the business ecosystem of their home country? How do business community ties and the patterns of competitive and collaborative interaction between them shape the globalization strategies of emerging economy multinationals?

Philips Chair in Strategy and International Business Professor Klaus E. Meyer explores the effects of the home country on the outward investment strategies of emerging economy multinationals in a special issue of the Asia Pacific Journal of Management which he co-edited. The issue includes three papers that made it through the rigorous review process which empirically focus on China. One paper investigates the effect of marketized central and local state ownership on foreign expansion of emerging market multinationals. Another looks at the imitative behaviour among Chinese multinationals, and the third explores how outward FDI strategies of Chinese auto component firms are shaped by sub-contracting supply relationships with developed market multinationals.

In the editorial introducing the special issue, Professor Meyer and his co-editors note that while prior research has strongly focussed on how the strategies of emerging market enterprises have been shaped by their home country institutions and resources, as more of these firms go global, future research should analyse in more detail how firms within an eco-system influence each other through competition, collaboration, imitation, or other patterns of interaction. Business groups, supplier networks, and peers worthy of imitation are examples of such interactions by which outward investors can strengthen each other abroad. Yet, the editors also point out that more research is needed to understand how emerging market multinationals implement their ambitious internationalization strategies.

The special issue is titled “Emerging Economy Multinationals and Home Country Effects: Does Origin Matter?” Professor Meyer’s co-editors are Bersant Hobdari and Peter Gammeltoft of Copenhagen Business School, and Jing Li of Beedie School of Business, Simon Fraser University. Read the issue here

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