IDEAS home Printed from https://ideas.repec.org/a/kap/asiapa/v30y2013i4p1169-1189.html
   My bibliography  Save this article

The impact of network relationships on internationalization process: An empirical study of Chinese private enterprises

Author

Listed:
  • Gloria Ge
  • Hugh Wang

Abstract

Chinese private enterprises have been internationalizing rapidly during the last two decades. This study adopts a network approach to examine what factors affect the internationalization process of Chinese private enterprises. Our survey of 108 private Chinese enterprises in the manufacturing sector in Zhejiang province in southeastern China revealed that business networks and personal networks affect the internationalization activities of Chinese private enterprises. Specifically, business networks have a positive impact on the timing of the first foreign market entry, the internationalization pace, and resource commitments, whereas personal networks have a positive impact on the internationalization pace and resource commitments, but not on the timing of the first foreign market entry. In this paper, we report our findings of our survey, discuss the contribution that this study makes to the existing internationalization literature, and suggest future research directions. Policy implications on how to facilitate the internationalization process are also discussed. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Gloria Ge & Hugh Wang, 2013. "The impact of network relationships on internationalization process: An empirical study of Chinese private enterprises," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1169-1189, December.
    • Handle: RePEc:kap:asiapa:v:30:y:2013:i:4:p:1169-1189
    DOI: 10.1007/s10490-012-9332-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10490-012-9332-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10490-012-9332-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Homin Chen & Tain-Jy Chen, 1998. "Network Linkages and Location Choice in Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(3), pages 445-467, September.
    3. H. Yeung, 2006. "Change and Continuity in Southeast Asian Ethnic Chinese Business," Asia Pacific Journal of Management, Springer, vol. 23(3), pages 229-254, September.
    4. Hongxin Zhao & Chin-Chun Hsu, 2007. "Social ties and foreign market entry: An empirical inquiry," Management International Review, Springer, vol. 47(6), pages 815-844, December.
    5. Deng, Ping, 2009. "Why do Chinese firms tend to acquire strategic assets in international expansion?," Journal of World Business, Elsevier, vol. 44(1), pages 74-84, January.
    6. Lianxi Zhou & Wei-ping Wu & Xueming Luo, 2007. "Internationalization and the performance of born-global SMEs: the mediating role of social networks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 673-690, July.
    7. Michael A. Hitt & Haiyang Li & William J. Worthington IV, 2005. "Emerging Markets as Learning Laboratories: Learning Behaviors of Local Firms and Foreign Entrants in Different Institutional Contexts," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 353-380, November.
    8. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 481-498, July.
    9. Jiangyong Lu & Xiaohui Liu & Hongling Wang, 2011. "Motives for Outward FDI of Chinese Private Firms: Firm Resources, Industry Dynamics, and Government Policies," Management and Organization Review, The International Association for Chinese Management Research, vol. 7(2), pages 223-248, July.
    10. Paul Ellis, 2000. "Social Ties and Foreign Market Entry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(3), pages 443-469, September.
    11. Cheng, Hsiang-Lin & Yu, Chow-Ming Joseph, 2008. "Institutional pressures and initiation of internationalization: Evidence from Taiwanese small- and medium-sized enterprises," International Business Review, Elsevier, vol. 17(3), pages 331-348, June.
    12. Lu, Jiangyong & Liu, Xiaohui & Wang, Hongling, 2011. "Motives for Outward FDI of Chinese Private Firms Firm Resources, Industry Dynamics, and Government Policies," Management and Organization Review, Cambridge University Press, vol. 7(2), pages 223-248, July.
    13. Keith D Brouthers, 2002. "Institutional, Cultural and Transaction Cost Influences on Entry Mode Choice and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 203-221, June.
    14. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    15. Yadong Luo, 2003. "Industrial dynamics and managerial networking in an emerging market: the case of China," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1315-1327, December.
    16. Max Boisot & Marshall W. Meyer, 2008. "Which Way through the Open Door? Reflections on the Internationalization of Chinese Firms," Management and Organization Review, The International Association for Chinese Management Research, vol. 4(3), pages 349-365, November.
    17. Boisot, Max & Meyer, Marshall W., 2008. "Which Way through the Open Door? Reflections on the Internationalization of Chinese Firms," Management and Organization Review, Cambridge University Press, vol. 4(3), pages 349-365, November.
    18. Dylan Sutherland & Lutao Ning, 2011. "Exploring 'onward-journey' ODI strategies in China's private sector businesses," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 9(1), pages 43-65.
    19. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
    20. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 499-518, July.
    21. Rui, Huaichuan & Yip, George S., 2008. "Foreign acquisitions by Chinese firms: A strategic intent perspective," Journal of World Business, Elsevier, vol. 43(2), pages 213-226, March.
    22. Ursacki, Terry & Vertinsky, Ilan, 1992. "Choice of entry timing and scale by foreign banks in Japan and Korea," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 405-421, April.
    23. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    24. Liu, Xiaming & Xiao, Wen & Huang, Xianhai, 2008. "Bounded entrepreneurship and internationalisation of indigenous Chinese private-owned firms," International Business Review, Elsevier, vol. 17(4), pages 488-508, August.
    25. Justin Tan, 1996. "Regulatory Environment and Strategic Orientations in a Transitional Economy: A Study of Chinese Private Enterprise," Entrepreneurship Theory and Practice, , vol. 21(1), pages 31-46, October.
    26. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 461-491, September.
    27. Andrea Bonaccorsi, 1992. "On the Relationship Between Firm Size and Export Intensity," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(4), pages 605-635, December.
    28. Klaus E Meyer, 2004. "Perspectives on multinational enterprises in emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(4), pages 259-276, July.
    29. Hitt, Michael A. & Li, Haiyang & Worthington, William J., 2005. "Emerging Markets as Learning Laboratories: Learning Behaviors of Local Firms and Foreign Entrants in Different Institutional Contexts," Management and Organization Review, Cambridge University Press, vol. 1(3), pages 353-380, November.
    30. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    31. Coviello, Nicole & Munro, Hugh, 1997. "Network relationships and the internationalisation process of small software firms," International Business Review, Elsevier, vol. 6(4), pages 361-386, August.
    32. Daphne W Yiu & ChungMing Lau & Garry D Bruton, 2007. "International venturing by emerging economy firms: the effects of firm capabilities, home country networks, and corporate entrepreneurship," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 519-540, July.
    33. Zhou, Lianxi, 2007. "The effects of entrepreneurial proclivity and foreign market knowledge on early internationalization," Journal of World Business, Elsevier, vol. 42(3), pages 281-293, September.
    34. Chetty, Sylvie & Blankenburg Holm, Desiree, 2000. "Internationalisation of small to medium-sized manufacturing firms: a network approach," International Business Review, Elsevier, vol. 9(1), pages 77-93, February.
    35. Pia Arenius, 2005. "The Psychic Distance Postulate Revised: From Market Selection to Speed of Market Penetration," Journal of International Entrepreneurship, Springer, vol. 3(2), pages 115-131, June.
    36. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Danchi Tan & Klaus E. Meyer, 2021. "Context-bridging and context-embedded experience: Growth drivers of emerging economy business groups," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 401-434, June.
    2. Mai, Nhat Chi, 2022. "Capital Raising and Management of Vietnamese Small and Medium Sized Enterprises after Integrating into Global Economy," OSF Preprints dv68m, Center for Open Science.
    3. Du, Jian & Xu, Yue & Voss, Hinrich & Wang, Song, 2021. "The impact of home business network attributes on Chinese outward foreign direct investment," International Business Review, Elsevier, vol. 30(4).
    4. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    5. Gilbert Kofi Adarkwah & Tine Petersen Malonæs, 2022. "Firm-specific advantages: a comprehensive review with a focus on emerging markets," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 539-585, June.
    6. Buckley, Peter J & Cui, Lin & Chen, Liang & Li, Yi & Choi, Yoona, 2023. "Following their predecessors’ journey? A review of EMNE studies and avenues for interdisciplinary inquiry," Journal of World Business, Elsevier, vol. 58(2).
    7. Hamid Etemad, 2015. "The principal components of the international entrepreneurial orientation-performance relation and its linkages with the key concepts and key constructs in the present issue," Journal of International Entrepreneurship, Springer, vol. 13(4), pages 361-369, December.
    8. Rong, Ke & Wu, Jinxi & Shi, Yongjiang & Guo, Liang, 2015. "Nurturing business ecosystems for growth in a foreign market: Incubating, identifying and integrating stakeholders," Journal of International Management, Elsevier, vol. 21(4), pages 293-308.
    9. Paul, Justin & Parthasarathy, Sundar & Gupta, Parul, 2017. "Exporting challenges of SMEs: A review and future research agenda," Journal of World Business, Elsevier, vol. 52(3), pages 327-342.
    10. Kunlin Xu & Judy Drennan & Shane Mathews, 2019. "Immigrant entrepreneurs and their cross-cultural capabilities: A study of Chinese immigrant entrepreneurs in Australia," Journal of International Entrepreneurship, Springer, vol. 17(4), pages 520-557, December.
    11. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    12. Idris, Bochra & Saridakis, George, 2018. "Local formal interpersonal networks and SMEs internationalisation: Empirical evidence from the UK," International Business Review, Elsevier, vol. 27(3), pages 610-624.
    13. Peter Hertenstein & Dylan Sutherland & John Anderson, 2017. "Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 69-96, March.
    14. Driffield, Nigel & Du, Jun & Song, Meng, 2021. "Internationalization pathways of Chinese private firms: A closer look at firm-specific advantages," Journal of International Management, Elsevier, vol. 27(3).
    15. Lisha He & Ronghao Jiang & Mia M. Bennett, 2020. "The rise of Chinese foreign direct investment in the United States: Disentangling investment strategies of state‐owned and private enterprises," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1562-1587, December.
    16. Ping Deng & Andrew Delios & Mike W. Peng, 2020. "A geographic relational perspective on the internationalization of emerging market firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(1), pages 50-71, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    2. Ilan Alon & John Anderson & Ziaul Haque Munim & Alice Ho, 2018. "A review of the internationalization of Chinese enterprises," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 573-605, September.
    3. 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.
    4. Dirk Holtbrügge & Sue Claire Berning, 2018. "Market Entry Strategies and Performance of Chinese Firms in Germany: The Moderating Effect of Home Government Support," Management International Review, Springer, vol. 58(1), pages 147-170, February.
    5. Xiaoming He & Subrata Chakrabarty & Lorraine Eden, 2016. "The global emergence of Chinese multinationals: A resource-based view of ownership and performance," Asian Business & Management, Palgrave Macmillan, vol. 15(1), pages 1-31, February.
    6. Wang, Chengqi & Hong, Junjie & Kafouros, Mario & Boateng, Agyenim, 2012. "What drives outward FDI of Chinese firms? Testing the explanatory power of three theoretical frameworks," International Business Review, Elsevier, vol. 21(3), pages 425-438.
    7. Fu, Xiaolan & Hou, Jun & Liu, Xiaohui, 2018. "Unpacking the Relationship between Outward Direct Investment and Innovation Performance: Evidence from Chinese firms," World Development, Elsevier, vol. 102(C), pages 111-123.
    8. Ajai S Gaur & Xufei Ma & Zhujun Ding, 2018. "Home country supportiveness/unfavorableness and outward foreign direct investment from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 324-345, April.
    9. Sun, Sunny Li & Peng, Mike W. & Lee, Ruby P. & Tan, Weiqiang, 2015. "Institutional open access at home and outward internationalization," Journal of World Business, Elsevier, vol. 50(1), pages 234-246.
    10. Lu, Jiangyong & Liu, Xiaohui & Filatotchev, Igor & Wright, Mike, 2014. "The impact of domestic diversification and top management teams on the international diversification of Chinese firms," International Business Review, Elsevier, vol. 23(2), pages 455-467.
    11. Ayden, Yuksel & Tatoglu, Ekrem & Glaister, Keith W. & Demirbag, Mehmet, 2021. "Exploring the internationalization strategies of Turkish multinationals: A multi-perspective analysis," Journal of International Management, Elsevier, vol. 27(3).
    12. Sun, Jinyun & Wang, Stephanie L. & Luo, Yadong, 2018. "Strategic entry or strategic exit? International presence by emerging economy enterprises," International Business Review, Elsevier, vol. 27(2), pages 418-430.
    13. Diego Quer & Enrique Claver & Laura Rienda, 2012. "Political risk, cultural distance, and outward foreign direct investment: Empirical evidence from large Chinese firms," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 1089-1104, December.
    14. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Lioliou, Eleni, 2016. "Does learning at home and from abroad boost the foreign subsidiary performance of emerging economy multinational enterprises?," International Business Review, Elsevier, vol. 25(1), pages 141-151.
    15. Luo, Yadong & Bu, Juan, 2018. "Contextualizing international strategy by emerging market firms: A composition-based approach," Journal of World Business, Elsevier, vol. 53(3), pages 337-355.
    16. Luo, Yadong & Maksimov, Vladislav & Bu, Juan, 2021. "Making Geographic Dispersion Work for Emerging Market MNEs," Journal of International Management, Elsevier, vol. 27(3).
    17. Athreye, Suma & Saeed, Abubakr & Baloch, Muhammad Saad, 2021. "Financial crisis of 2008 and outward foreign investments from China and India," Journal of World Business, Elsevier, vol. 56(3).
    18. Liu, Yi & Li, Yuan & Xue, Jiaqi, 2011. "Ownership, strategic orientation and internationalization in emerging markets," Journal of World Business, Elsevier, vol. 46(3), pages 381-393, July.
    19. Guillermo Cardoza & Gaston Fornes, 2011. "The internationalisation of SMEs from China: The case of Ningxia Hui Autonomous Region," Asia Pacific Journal of Management, Springer, vol. 28(4), pages 737-759, December.
    20. Hongxin Zhao & Chin-Chun Hsu, 2007. "Social ties and foreign market entry: An empirical inquiry," Management International Review, Springer, vol. 47(6), pages 815-844, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:asiapa:v:30:y:2013:i:4:p:1169-1189. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.