Bounded entrepreneurship and internationalisation of indigenous Chinese private-owned firms

Abstract

Based on 16 in-depth case studies this paper argues that neither the Uppsala model nor the theory of international new ventures can explain effectively the internationalisation of indigenous Chinese private-owned firms. Instead, "bounded entrepreneurship" is proposed to interpret the unique internationalisation patterns and competitive positions of these firms. This explanation is incorporated into a framework of entrepreneurship which builds on existing theories and is sufficiently flexible to accommodate a range of conditions influencing a firm's internationalisation decisions.

The Resource-based View and SME Internationalisation: An Emerging Economy Perspective

“…Empirical evidence also shows that the positive effects of the cost-based strategy on export performance are stronger among emerging economy firms that internationalise to advanced rather than other emerging economy markets where domestic firms can also draw on low-cost resources and where a differentiation strategy may therefore be more successful (Aulakh et al, 2000). A case study by Liu et al (2008) shows that low price alone does not suffice to successfully compete in international markets, and it is the quality-price ratio that matters.…”

“…However, due to deficiencies in the institutional environment of emerging economies, and the smallness of the firms themselves, not all internationalising SMEs can access critical resources required for internationalisation. Though prior research on barriers to internationalisation in emerging economy contexts is limited, it can still be concluded from existing studies that internationalising emerging economy SMEs often lack such critical resources as venture capital (Nowiński & Rialp, 2013), international experience, human capital and managerial skills, international network ties (Liu et al, 2008;Nowiński & Rialp, 2013;Thai & Chong, 2008), ICT technology and skills (Thai & Chong, 2008), and advanced technology (Liu et al, 2008). These findings should be interpreted with caution, however, and generalisations cannot be made without taking into consideration the specifics of the national institutional context and the stage the specific country is at in its transition to the market economy, as differences across emerging economies emerging economy can be pronounced.…”

Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms

“…EE firms, though not possessing the sort of FSRs owned by DE MNEs (e.g. advanced technologies, marketing techniques and superior management know-how), still need to possess resource advantages in order to 8 overcome their liabilities of foreignness (Liu et al, 2008;Wang et al, 2012). These advantages are termed 'comparative ownership advantages' (COAs) by Sun, Peng, Ren and Yan (2012) and arise from internal FSRs or the interaction between country-specific advantages (CSAs) and FSRs.…”

“…Existing studies have mainly focused on state-owned enterprises (SOEs), listed companies, or a mix of firms with different types of ownership (see Table A1). Only a few studies have centred explicitly on POEs despite the fact that POEs are an important driving force behind China's OFDI, in addition to export growth and economic development (Liu, Xiao & Huang, 2008). In 2012, POEs accounted for 9.5% of China's OFDI flows (The Economist, 2013), growing from less than 4% two years before, and their role in China's 'go global' strategy will continue to increase (Lin, 2010).…”

“…The strategic behaviour of POEs differs from that of non-5 POEs (Lin, 2010;Ramasamy, Yeung & Laforet, 2012;Rui & Yip, 2008). POEs are increasingly operating in a free market environment and are more likely to be influenced by market forces and to be commercially motivated (Liu et al, 2008;Ramasamy et al, 2012). They more closely resemble their developed economy (DE) counterparts (Liang, Lu & Wang, 2012).…”