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Network Resources for Internationalization: The Case of Taiwan's Electronics Firms

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  • Tain-Jy Chen
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    Abstract

    This paper illustrates foreign direct investment (FDI) as the management of important network relations, using Taiwan's electronics firms as an example. Through FDI, seemingly small and weak firms propel the process of internationalization by making maximum use of external resources to which they have access. FDI often starts at a location close to the home base where support from the domestic networks can be drawn, subsequently moving on to more distant locations after investors have accumulated new network resources. The location chosen is usually an area rich in network resources or in close proximity to such rich networks. FDI enables the investors to construct a regional, or even global, sub-network under their control to supply a set of wide-ranging, differentiated and low-cost products in a flexible fashion, and sometimes within close proximity to the markets. With this capacity for versatility, investors become valuable partners for multinational firms that offer global services. Copyright Blackwell Publishing Ltd 2003.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Management Studies.

    Volume (Year): 40 (2003)
    Issue (Month): 5 (07)
    Pages: 1107-1130

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    Handle: RePEc:bla:jomstd:v:40:y:2003:i:5:p:1107-1130

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    Cited by:
    1. A. Heirman & B.T Clarysse & V. Van Den Haute, 2003. "How and Why Do Firms Differ at Start-Up? A Resource-Based Configurational Perspective," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/198, Ghent University, Faculty of Economics and Business Administration.
    2. Liu, Bih Jane, 2011. "MNEs and Local Linkages: Evidence from Taiwanese Affiliates," World Development, Elsevier, vol. 39(4), pages 633-647, April.
    3. Musteen, Martina & Francis, John & Datta, Deepak K., 2010. "The influence of international networks on internationalization speed and performance: A study of Czech SMEs," Journal of World Business, Elsevier, vol. 45(3), pages 197-205, July.
    4. Ciravegna, Luciano & Majano, Sara B. & Zhan, Ge, 2014. "The inception of internationalization of small and medium enterprises: The role of activeness and networks," Journal of Business Research, Elsevier, vol. 67(6), pages 1081-1089.
    5. Liu, Yunshi & Ahlstrom, David & Yeh, Kuang S., 2006. "The separation of ownership and management in Taiwan's public companies: An empirical study," International Business Review, Elsevier, vol. 15(4), pages 415-435, August.
    6. Ma, Xufei & Yiu, Daphne W. & Zhou, Nan, 2014. "Facing global economic crisis: Foreign sales, ownership groups, and corporate value," Journal of World Business, Elsevier, vol. 49(1), pages 87-100.
    7. Hatani, Faith & McGaughey, Sara L., 2013. "Network cohesion in global expansion: An evolutionary view," Journal of World Business, Elsevier, vol. 48(4), pages 455-465.
    8. Boehe, Dirk Michael, 2011. "Exploiting the liability of foreignness: Why do service firms exploit foreign affiliate networks at home?," Journal of International Management, Elsevier, vol. 17(1), pages 15-29, March.

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