Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry

Peter Hertenstein; Dylan Sutherland; John Anderson

doi:10.1007/s10490-015-9422-3

Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry

Peter Hertenstein
, Dylan Sutherland
, John Anderson

Management and Marketing

Research output: Contribution to journal › Article › peer-review

88 Scopus citations

Abstract

We explore how the outward FDI strategies of Chinese auto component multinational corporations (MNCs) are shaped by sub-contracting supply relationships established with developed market MNCs. We argue the strong presence of foreign MNC business networks developed through prior inward FDI constitutes an important home country effect influencing the outward FDI strategies of emerging market MNCs. Using the updated internationalization process model, we show how commitment to business networks is a critical mechanism driving the internationalization trajectories of Chinese auto component MNCs. This includes geographic location choices to psychically distant developed markets, strategic asset seeking orientation, pace of internationalization, and entry mode decisions.

Original language	English
Pages (from-to)	69-96
Number of pages	28
Journal	Asia Pacific Journal of Management
Volume	34
Issue number	1
DOIs	https://doi.org/10.1007/s10490-015-9422-3
State	Published - Mar 1 2017

Keywords

Auto components
Business networks
China
Internationalization process model
Inward-outward FDI linkages

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10.1007/s10490-015-9422-3

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abstract = "We explore how the outward FDI strategies of Chinese auto component multinational corporations (MNCs) are shaped by sub-contracting supply relationships established with developed market MNCs. We argue the strong presence of foreign MNC business networks developed through prior inward FDI constitutes an important home country effect influencing the outward FDI strategies of emerging market MNCs. Using the updated internationalization process model, we show how commitment to business networks is a critical mechanism driving the internationalization trajectories of Chinese auto component MNCs. This includes geographic location choices to psychically distant developed markets, strategic asset seeking orientation, pace of internationalization, and entry mode decisions.",

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AB - We explore how the outward FDI strategies of Chinese auto component multinational corporations (MNCs) are shaped by sub-contracting supply relationships established with developed market MNCs. We argue the strong presence of foreign MNC business networks developed through prior inward FDI constitutes an important home country effect influencing the outward FDI strategies of emerging market MNCs. Using the updated internationalization process model, we show how commitment to business networks is a critical mechanism driving the internationalization trajectories of Chinese auto component MNCs. This includes geographic location choices to psychically distant developed markets, strategic asset seeking orientation, pace of internationalization, and entry mode decisions.

KW - Auto components

KW - Business networks

KW - China

KW - Internationalization process model

KW - Inward-outward FDI linkages

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Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry

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Keywords

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