CHINESE FAMILY ENTERPRISE: A THEORETICAL ANALYSIS WITH IMPLICATIONS FOR MNE THEORY & RESEARCH.

Abstract

This article analyzes the workings of Chinese family firms within the framework of ownership, location and internalization advantages. Chinese family firms deviate from the conventional model of the western multinational enterprise in important ways. Nearly 60 million overseas Chinese have built a vast network of highly successful businesses. Many of these companies invest internationally, typically within Southeast Asia and predominantly in China. The majority of the foreign direct investment driving the economy of China has come from overseas Chinese sources. It is estimated that more than 100,000 joint ventures have been established within China by overseas Chinese, mainly in Guangdong and Fujian provinces. Thus many overseas Chinese family firms are operating in effect as multinational enterprises. Most Chinese family companies are owned and controlled by members of a single family. Members of the family or trusted associates supply many of the management functions. Chinese family firms share many of the salient features of other Asian family firms and of family-owned business in general, while manifesting distinctive characteristics that reflect the unique historical and cultural experience of the Chinese people.