Author
Listed:
- Zhengke Zhou
- Yutian Liang
- Yiting Tsai
Abstract
The role of intermediaries in foreign direct investment (FDI) within global production networks remains significantly underresearched. While economic geographers have framed international cooperation zones as intermediate locations for investment, they have largely neglected the mechanisms through which these zones enable multinational enterprises (MNEs) to achieve territorial, network, and societal embeddedness. This article fills this gap by developing a framework that considers ethnicity as a critical intermediary in FDI of small and medium-sized enterprises (SMEs). Through a long-term case study of Chinese small and medium-sized MNEs in the Thai–Chinese Rayong Industrial Zone, this article reveals how extensive ethnic Chinese networks empower Chinese entrepreneurs to invest and embed in international cooperation zones as interplaces. In the preinvestment stage, these zones facilitate the territorial embeddedness of Chinese FDI in host countries by integrating both formal and informal relationships rooted in ethnicity-based social networks. In the postinvestment stage, the management committee of the industrial zone and ethnic Chinese associations function as key nodes of ethnicity-based social networks, promoting intermediation processes that enable collaboration between Chinese enterprises and local firms and societies. These intermediation processes contribute to the network and societal embeddedness of Chinese FDI into interplaces in host countries.
Suggested Citation
Zhengke Zhou & Yutian Liang & Yiting Tsai, 2025.
"The Role of Intermediaries in Foreign Direct Investment of Small and Medium-Sized Multinational Enterprises: How Does Ethnicity Matter?,"
Economic Geography, Taylor & Francis Journals, vol. 101(2-3), pages 155-181, May.
Handle:
RePEc:taf:recgxx:v:101:y:2025:i:2-3:p:155-181
DOI: 10.1080/00130095.2025.2498764
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