Speed Up or Slow Down? Toward a Domestic Dependency Network Model

Abstract

The Uppsala model has been widely used to explain variations in firms’ internationalization speed by focusing on foreign networks. To correct a potential geographic blind spot in the Uppsala model, we add a domestic dependency network viewpoint, concentrating upon political and business ties with domestic network actors, based upon resource dependence theory (RDT). We test the proposed model on a sample of 689 Chinese multinational enterprises (CMNEs) between 1999 and 2013. The results show that CMNEs politically tied to the central government internationalize faster than CMNEs without such ties. We also find that CMNEs with ties to local governments and to foreign JV partners internationalize more slowly than CMNEs without such ties. We also show how multiple domestic dependency network ties interact to influence internationalization speed. We discuss the implications of our findings for the Uppsala model and RDT.