Does state ownership facilitate outward FDI of Chinese SOEs? Institutional development, market competition, and the logic of interdependence between governments and SOEs

Huang, Yuanyuan; Xie, En; Yu, Li; Reddy, Kotapati Srinivasa

doi:10.1016/j.ibusrev.2016.06.005

Cited by 156 publications

(183 citation statements)

References 69 publications

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“…Second, MNEs may develop CPC in their home countries with the aim of mobilizing resources to enhance their global operations. The extent to which such home country CPC help or hinder MNEs' international strategies, however, varies with the political institutions of the home country (Estrin, Meyer, Nielsen, & Nielsen, ; Fernández‐Méndez, García‐Canal, & Guillén, ; Huang, Xie, Li, & Reddy, ). For example, many political actors are concerned with the economic development of only the home country and would, thus, discourage overseas investment, notably if it involves production activity abroad that could be done at home (offshoring would be a prime example of this).…”

Section: Cpc and Global Strategymentioning

confidence: 99%

“…Even among China‐focused studies, results are inconsistent. For example, some scholars, from a political perspective, argue that home state ownership represents a hindrance for foreign market entry (e.g., Cui & Jiang, ; Huang et al, ), while others, from a resource perspective, view this as a source of home institutional support for foreign expansion (e.g., Morck et al, ; Yamakawa, Peng, & Deeds, ). Both arguments have theoretical merits.…”

Section: Cpc In International Business: a Literature Reviewmentioning

confidence: 99%

“…Through this perspective, home state dependence, as reflected in ownership connections with the home country government, can motivate firms to diversify into international markets as an escape tactic (Choudhury & Khanna, ). However, too much dependence on the home country state may compromise strategic autonomy of the firm and, thus, hinder their internationalization (Huang et al, ).…”

Section: Cpc In International Business: a Literature Reviewmentioning

confidence: 99%

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Corporate political connections in global strategy

Cui

et al. 2018

Global Strategy Journal

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Research Summary: The role of corporate political connections (CPC) in global strategy has been examined in a variety of institutional contexts and analyzed from different theoretical perspectives. This literature, along with the articles in this special issue, demonstrate the importance of contextualization in understanding the motivations, processes, and outcomes of firms developing and utilizing CPC in global strategy. We argue that context‐specific aspects of CPC, such as the political system in which the firm is operating, need to be incorporated more systematically to advance theory development globally. Future studies on CPC can advance this agenda through cross‐country comparative research, deeper engagement with political science literature, linking CPC with other nonmarket strategies, and configurational analysis of the multidimensional context of CPC. Managerial Summary: Multinational companies not only compete in a market environment, they engage with political actors in both their home and host societies. This special issue brings together research that explores how companies use their corporate political connections (CPC) to achieve firm objectives. Each study takes a different approach to studying the phenomenon, informed by the national context of their empirical data. Together, these studies highlight the importance of CPC around the world. However, the variation in research approaches also highlights that the “how and why” of companies' development and utilization of CPC vary across cultures and political systems. In consequence, the development of managerial recommendations always needs to carefully consider the pertinent political context of the available empirical evidence.

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Section: Cpc and Global Strategymentioning

confidence: 99%

Section: Cpc In International Business: a Literature Reviewmentioning

confidence: 99%

Section: Cpc In International Business: a Literature Reviewmentioning

confidence: 99%

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Corporate political connections in global strategy

Cui

et al. 2018

Global Strategy Journal

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“…According to [2], China's OFDI in recent years has four main characteristics: the main way of China's OFDI is through transnational mergers and acquisitions, the target enterprises of China's OFDI are mostly failed enterprises, which often lead to the sluggish performance of enterprises after M&A, and political resistance from developed host countries. According to the research of [3], the institutional development of the mother country and the competition in the domestic market can effectively alleviate the negative effects brought by statecontrolled and state-owned enterprises on OFDI.…”

Section: Literature Reviewmentioning

confidence: 99%

Identifying Key Success Factors of Cross-border Mergers and Acquisitions for Chinese State-owned Enterprises

Tian¹,

Tang²,

Kong³

2019

Proceedings of the Fourth International Conference on Economic and Business Management (FEBM 2019)

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In recent years, China has vigorously promoted domestic enterprises to conduct direct foreign investment and promote the internationalization of Chinese enterprises. Stateowned enterprises in China are the main exporters of China's foreign direct investment. Research on the factors of success or failure in cross-border mergers and acquisitions (M&A) is gradually attracting the attention of scholars all over the world. This paper discusses the successful factors of Chinese stateowned enterprises' cross-border M&A by studying the relevant literature and drawing on previous research and achievements. From the Zephyr M&A transaction database, this paper selects 481 valid transaction data of Chinese state-owned enterprises' cross-border mergers and acquisitions from 1997 to 2017 using the seven influencing factors selected by the analytic hierarchy process as variables and introduces a binary logistic regression model to analyze the sample data by using SPSS software. This paper classifies success factors into three categories: macro level, micro level and transaction level. By using the analytic hierarchy process (AHP) to determine the index weight of different levels, the main three categories can be management system of host country, host divided into seven influencing factors, which include the host country economy system, country and home country from formal institution, informal system from the host country and home country, the acquiring firm's experience of transnational M&A, target company industry on the sensitivity of the host country, and acquisitions.

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“…Over recent years, the internationalisation of state-owned enterprises (SOEs) has become an important phenomenon in international business, thus receiving increasing attention in the literature (Cuervo-Cazurra et al, 2014), in particular, when analysing the behaviour of EMNEs (Hong et al, 2015;Huang et al, 2017;. SOEs take pre-eminence in emerging markets, with the state being an investor that provides them with the financial resources required to offer needed products and services in an underdeveloped local environment (Cuervo-Cazurra et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

FDI drivers and establishment mode choice of emerging-market MNEs: the role of state ownership

Quer

García

Andreu

2020

EJIM

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Drawing on an institutional perspective, this study analyses how state ownership affects the relationship between foreign direct investment (FDI) drivers and establishment mode choice of emerging-market multinational enterprises (EMNEs). We argue that state-owned EMNEs encounter stronger institutional pressures in technology-and natural resource-rich countries derived from concerns about takeovers of local companies. Moreover, in low-growth markets, state-owned EMNEs do not always behave as pure profitmaximisers since they are usually subject to home government institutional influences and pursue policy goals. For these reasons, we hypothesise that their choice between acquisitions and greenfield investments differs from that of privately-owned EMNEs. Our analysis of 643 FDIs undertaken by Chinese companies confirms that state-owned EMNEs are less likely to choose acquisitions in host countries with a higher technology and natural resource endowment. However, the relationship between host market growth and establishment mode is not influenced by state ownership.

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Does state ownership facilitate outward FDI of Chinese SOEs? Institutional development, market competition, and the logic of interdependence between governments and SOEs

Cited by 156 publications

References 69 publications

Corporate political connections in global strategy

Corporate political connections in global strategy

Identifying Key Success Factors of Cross-border Mergers and Acquisitions for Chinese State-owned Enterprises

FDI drivers and establishment mode choice of emerging-market MNEs: the role of state ownership

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