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Will China's Multinationals Succeed Globally or Regionally?

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Author Info

  • Rugman, Alan M.
  • Li, Jing

Abstract

Basic theory suggests that multinational enterprises (MNEs) succeed when they develop knowledge-based capabilities, often called firm-specific advantages (FSAs). In China's case its large MNEs have few such knowledge based FSAs. Instead, they are building scale economies based on China's country-specific advantages (CSAs) in relatively cheap labor and natural resources. Thus, China's MNEs will likely become knowledge seekers as they go abroad, not knowledge takers. Unlike Western MNEs who transfer knowledge and technology through their FSAs, China's MNEs will lack such FSAs for some years to come. While China's MNEs will have difficulty in sustaining their initial forays abroad, it is likely that they will expand intra-regionally rather than globally and in a similar manner to other large multinationals.

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Bibliographic Info

Article provided by Elsevier in its journal European Management Journal.

Volume (Year): 25 (2007)
Issue (Month): 5 (October)
Pages: 333-343

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Handle: RePEc:eee:eurman:v:25:y:2007:i:5:p:333-343

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Related research

Keywords: Chinese multinationals Regional strategy Firm-specific advantages Country-specific advantages Knowledge transfer;

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Citations

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Cited by:
  1. Piscitello , Lucia & Rabellotti , Roberta & Scalera , Vittoria Giada, 2014. "Chinese and Indian M&As in Europe: The relationship between motive and ownership choice," CIRCLE Electronic Working Papers 2014/3, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  2. Lin Cui & Fuming Jiang, 2010. "Behind ownership decision of Chinese outward FDI: Resources and institutions," Asia Pacific Journal of Management, Springer, vol. 27(4), pages 751-774, December.
  3. Fleury, Afonso & Fleury, Maria Tereza Leme, 2014. "Local enablers of business models: The experience of Brazilian multinationals acquiring in North America," Journal of Business Research, Elsevier, vol. 67(4), pages 516-526.
  4. Rajah Rasiah, 2012. "Book Review: The Rise of Indian Multinationals: Perspectives on Indian Outward Foreign Direct Investment, by Karl Sauvant and Jaya Prakash Pradhan (eds), with Ayesha Chatterjee and Brian Harley, New Y," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(3), pages 185-188, October.
  5. Isabel Álvarez & Celia Torrecillas, 2013. "What does it matter about the home countries of emerging multinationals?," The Institute for International Integration Studies Discussion Paper Series iiisdp434, IIIS.
  6. Jiang, Fuming & Stening, Bruce W., 2013. "Do indigenous firms incur a liability of localness when operating in their home market? The case of China," Journal of World Business, Elsevier, vol. 48(4), pages 478-489.
  7. Fan, Di & Zhu, Cherrie Jiuhua & Nyland, Chris, 2012. "Factors affecting global integration of Chinese multinationals in Australia: A qualitative analysis," International Business Review, Elsevier, vol. 21(1), pages 13-26.
  8. repec:emp:wpaper:ec8-125-i is not listed on IDEAS
  9. Tony Tong & Jing Li, 2008. "Real options and MNE strategies in Asia Pacific," Asia Pacific Journal of Management, Springer, vol. 25(1), pages 153-169, January.
  10. repec:emp:wpaper:ec8-127-i is not listed on IDEAS
  11. Dirk Christian Dohse & Robert Hassink & Claudia Klaerding, 2012. "Emerging multinationals, international knowledge flows and economic geography: a research agenda," Kiel Working Papers 1776, Kiel Institute for the World Economy.
  12. Hennart, J.M.A., 2012. "Emerging market multinationals and the theory of the multinational enterprise," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5608228, Tilburg University.
  13. Cui, Lin & Jiang, Fuming, 2009. "FDI entry mode choice of Chinese firms: A strategic behavior perspective," Journal of World Business, Elsevier, vol. 44(4), pages 434-444, October.
  14. Wei, Yingqi & Zheng, Nan & Liu, Xiaohui & Lu, Jiangyong, 2014. "Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms," International Business Review, Elsevier, vol. 23(2), pages 356-370.

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