Local integration and co‐evolution of internationalizing Chinese firms

Abstract

This study investigates the integration of internationalizing Chinese firms into local host markets. We explore the market‐driven investment of a new wave of Chinese private and local state‐owned firms in Australia since 2012, which has replaced the initial large‐scale investment in resources by central state‐owned enterprises. Using an in‐depth analysis of nine Chinese firms operating in various sectors of the Australian market, we argue that market integration, adaptation, and bilateral institution‐building through co‐evolution and empowerment of local subsidiaries of Chinese multinational enterprises results in entrepreneurial autonomy and characterizes a new generation of Chinese investors. We propose that Chinese multinational subsidiaries have transferred domestic practices to the Australian market and have reconfigured domestic and host market resources to gain a competitive advantage in their original investment industry and new industries. Our study advances middle‐range theory building and provides a practical understanding of the strengths and weaknesses of Chinese investors, their potential to disrupt local markets, and their responsiveness to market‐oriented institutional guidance. The results of this study suggest that the bilateral institution‐building and resource reconfiguration capabilities of Chinese enterprises can be transferred to other developed and developing markets, including Belt and Road Initiative countries.

Between Growth and National Security in Host Countries: FDI Regulation and Chinese Outward Investments in Australia’s Critical Infrastructure

“…The assistance of the host country with the development of technology can be an increasingly important factor. Recent research shows examples of such cooperation whereby Chinese companies have transferred domestic practices to the Australian market, raising their competitive advantage in their original investment industry, as well as in the new industries (Li & Hendrischke, 2020). As we can also observe during the COVID-19 pandemic, in advanced economies, the public perceptions and attitudes will definitely have an influence on policymakers' responses toward one or another exogenous shock, epidemiological, economic, or the combination of both.…”

Bridging ‘Home’ Political and Economic Rationalities with ‘Host’ Demands and Constraints: The Case of Regional Chinese State‐owned Multinational Corporations

“…political cadre and business practitioner) dovetails with the above-mentioned research agenda (Khan et al, 2019;Lam, 2017;Rui and Bruyaka, 2021). While expatriate managers from central SOMNCs tend to be under pressure to adhere to government diktat and maintain legitimacy (Li, Cui and Lu, 2014;Hong, Wang and Kafouros, 2015), we argue that regional SOMNC managers could adopt more nuanced and strategic initiatives (Li and Hendrischke, 2020). They tend to have more 'local agency', for example business diversification and the localization of the management cadre, given their market-oriented mandate (Li, Cui and Lu, 2014;Wang et al, 2022).…”

“…SOMNC steering (e.g. at federal, state, provincial or municipal levels) can be motivated by an uneven combination of diplomatic, commercial and financial interests (Gu et al ., 2016; Hong, Wang and Kafouros, 2015; Li and Hendrischke, 2020). Li, Cui and Lu (2014, p. 986) note that central SOMNCs serve as ‘instruments of national policy’ in accordance with macro (geo)political directives and considerations.…”

“…So far, however, there have been relatively few attempts to delve into the strategies and operations of what we refer to as ‘subnational’ SOMNCs, namely entities owned by regional, provincial or other municipal bodies, whose ownership was transferred by the central government. Although some form of political control has remained, there has been relatively more interest in regional SOMNCs achieving economic returns, growing market share and fostering managerial autonomy (see also Li, Cui and Lu, 2014; Li and Hendrischke, 2020; Wang et al ., 2022). In this context of international expansion, expatriate managers are seen to be crucial in achieving these goals while having ‘to strike a balance between […] being aware of political connections at home and being flexible when imperatives imposed by the government arise as a consequence of overriding economic and social contingencies’ (Mariotti and Marzano, 2019, p. 687).…”

Multilevel relational influences on HRM practices: a cross-country comparative reflective review of HRM practices in Asia

“…Specifically, we assert that influences from the regionalization of economies, national business systems (incorporating divergent cultural and institutional influences and converging national business practices with managerial ideologies), industry, global multinational enterprises (MNEs), and finally, individual-level predispositions collectively shape and variously influence the nature and extent of HRM practices. A view that these multiple levels of influence prevail has been widely acknowledged, for example, in studies on the influence of regionalization of economies (Ferner & Quintanilla, 1998 ; Li & Hendrischke, 2020 ), national business systems (Do et al, 2020 ; Whitley, 1999 ; Witt & Redding, 2014 ), industry (Malik et al, 2017 , 2020; Milliman et al, 1991 ; Zhang et al, 2022 ), global MNEs (e.g., Ferner, 1997 ; Rosenzweig & Nohria, 1994 ), and individual-level predispositions (Froese, 2013 ; Hitotsuyanagi-Hansel et al, 2016 ; Minbaeva et al, 2012 ; Singh et al, 2021 ) on HRM practices. Nevertheless, most research is generally undertaken at one or at most two levels of analysis (Li et al, 2022 ).…”