Chinese Multinational Corporations Research Articles

Dynamic Mechanisms of R&D Innovation in Chinese Multinational Corporations: The Impact of Government Support, Market Competition and Entrepreneurial Spirit

This study focuses on the R&D innovation drive mechanism of Chinese multinational companies. Using a grounded theory, five driving factors were identified: government support, entrepreneurial spirit, market competition, company profits, and the innovation environment of the host country. Dynamic Qualitative Comparative Analysis was then employed to assess the validity of these driving factors and determine their pathways of influence, leading to the establishment of a driving mechanism. Finally, structural equation modeling was used to explore the magnitude of the effects of these driving factors. Based on data analysis from Chinese A-share listed multinational companies from 2007 to 2022, it was found that entrepreneurial spirit serves as the core driving force, while government support and market competition act as mediating variables that significantly promote R&D innovation among Chinese multinational companies. However, company profits were found to have a negative impact. Additionally, the innovation environment of the host country plays a moderating role, enhancing the positive effects of government support and market competition on innovation. These findings emphasize the importance of the synergy between the internal and external resources for Chinese multinational companies, providing important insights for integrating global resources to enhance international competitiveness and innovation capabilities.

Foreign business exposure, policy uncertainty, and investment allocation decisions of Chinese multinational corporations

Foreign business exposure, policy uncertainty, and investment allocation decisions of Chinese multinational corporations

Country-by-Country reporting, corporate tax avoidance, and supply chain structure: A bunching analysis based on income manipulation by Chinese multinational corporations

Due to the endogeneity issue arising from the voluntary manipulation of MNCs own operating income, we employed bunching analysis to investigate the impact of Country-by-Country reporting(CbCR) on tax avoidance behavior of Chinese multinational corporations. The study found that multinational corporations' operating income exhibited bunching at 5.5 billion RMB. Within the bunching interval, the distribution of actual-value enterprises was 111 % higher than that of counterfactual enterprises, with an elasticity of 0.0359. Tax avoidance by multinational corporations significantly decreased within the manipulation interval, leading to a noticeable increase in taxable amounts. A series of robustness tests confirmed the validity of the above conclusions. This suggests that CbCR could serve as an important policy tool to combat tax base erosion and profit shifting. Furthermore, CbCR led Chinese multinational corporations to increase their investment scale while reducing profit shifting, but also resulted in a decrease in employment and a more concentrated supply chain structure. Careful evaluation is needed regarding the future expansion of the scope and target users of CbCR.

Examining Chinese Multinational Corporations as Agents of Development and/or Underdevelopment in South Africa

The investment of the Chinese government has been one of the biggest across the globe and Multinational Corporations (MNCs) have been at the center of this investment. Some scholars have referred to this as a Neo-colonial strategy by China on the African continent as most of these investments are only fostering their interests while degrading African states. In addition, these MNCs have acted as important agents in economic, social, and infrastructural development/ underdevelopment in the state. Thus, the paper sought to examine Chinese MNCs as agents of development and underdevelopment in South Africa. From this premise, the paper adopted a qualitative research method and case study approach of five MNCs from China operating in South Africa to critically examine their role as agents of development and underdevelopment in South Africa. The findings of the paper show succinctly that MNCs within the mining, technology, and industrial sectors of China have critically contributed to the development and underdevelopment of the country. Hence, it recommends that these companies must adopt strategies that contribute positively to the country’s long-term growth while minimizing negative impacts. They further need to implement and adhere to rigorous environmental standards to minimize their ecological footprint to ensure sustainable development in South Africa. The paper concluded by noting that there are challenges and opportunities created by MNCs which include job creation, contamination of water, destruction of wildlife, forceful displacement of settlements, and infrastructural development. Keywords: Chinese MNCs, Agents of Development and/or Underdevelopment, South Africa’s Development, and Chinese Investments.

The Protection of Labor Rights of Chinese Multinational Corporations under the Belt and Road Initiative

With the deepening of the "Belt and Road" Initiative, the number of Chinese overseas workers is increasing, and the protection of labor rights and interests is becoming more and more prominent. This article analyzes the problems in the protection of labor rights and interests of Chinese multinational corporations and their causes, and finds that these problems are mainly concentrated in the aspects of identity legitimacy, law application, discrimination in employment access and neglect of the right to human dignity. The incompleteness of the host country's legal and social security system, the inadequacy of diplomatic and consular protection in the home country, the lack of social responsibility of transnational corporations, and the weak awareness of workers' rights are all important reasons for the violation of workers' rights and interests. In order to solve these problems, the paper proposes optimization paths at the national level, the level of transnational companies and the level of workers themselves, including building regional agreements, strengthening legal aid, implementing legal training and raising awareness of self-protection. Through multi-faceted efforts, we can better protect the legitimate rights and interests of overseas workers of Chinese multinational companies, promote the smooth implementation of the Belt and Road Initiative, and achieve the goal of win-win cooperation.

Trust building across and within cultures: A study of Guinea, West Africa, and China

Adopting a cross-cultural perspective, this study provides insights into how Chinese multinational corporations (MNCs) with a focus on Confucian values, builds trust and contributes to the globalization process in African settings, specifically Guinea. Using a mixed-methods methodology, we explore the dynamics of trust relationships within and across cultures. In Study 1, semi-structured interviews were conducted with 19 Chinese supervisors, 20 Guinean supervisors and 19 Guinean workers. We found Chinese expatriates to emphasize ability and integrity in trust building while Guinean workers care more about benevolence. Drawing on the insights of study 1, we proposed a model of interpersonal trust within and across cultures. In this Study 2, data was collected from 182 Guinean workers and their direct Chinese/Guinean supervisors. We found Guinean subordinates’ trust in the organization to mediate between their trust in Guinean supervisors and their performance. In addition, Guinean supervisor’s trust in Chinese supervisor positively affects Guinean subordinate’s trust in organization and also moderates the positive relationship between Guinean subordinates’ trust in the organization and their performance. We draw implications for management relationships between two cultures that are seemingly different from both studies.

Does capital market liberalization enhance overseas market power of investment firms? An empirical study based on Chinese multinational corporations

This study empirically analyzes the 2012–2022 data of Shanghai and Shenzhen A-share investment-oriented listed companies to determine the impact of capital market liberalization on investment firms’ overseas market power. It finds that both capital market liberalization and research and development investment enhance the overseas market power of investment firms. The impact of capital market liberalization varies based on the different ownership properties and life cycles of firms.

Changing Triangular Relationships: A Historical Analysis of Labour Relations at a Chinese Mine in Papua New Guinea

This paper contributes to the literature on the expansion of Chinese multinational corporations (CMCs) in Papua New Guinea (PNG) by comparing the operation of a Chinese mine to that of the German New Guinea Company. I start by looking at the two economic positions (helper and merchant) performed by early Chinese immigrants to New Guinea during the colonial era and the host hostility they encountered. 1 Then, a case study of a Chinese mining company in postcolonial PNG illustrates how local employees learned to negotiate with Chinese management through unionization instead of striking. In the meantime, Chinese personnel became subject to PNG industrial regulations based on Australian standards rather than operating as a modernizing agent to educate local workers. 2 These findings suggest that, despite specific new Chinese communities becoming investors, they must dedicate resources towards comprehending local customs and legislation, given the enhanced agency of local actors.

A social identity perspective on language and researchers’ cultural identities in qualitative interviews in multinational corporations

PurposeThis study aims to advance knowledge in international management research about how researchers’ cultural identity in fieldwork encounters may be grounded in the choice of language in multicultural and multilingual projects.Design/methodology/approachThe study is based on critical reflections on the experience of two co-authors as Chinese nationals conducting research in overseas Chinese multinational corporations (MNCs) in developing economies.FindingsDrawing on social identity theory, the authors demonstrate that the cultural identity and cultural insider/outsider positionality of both the researcher and research participants can be shaped by language, translation and other artefacts in cross-cultural interviews, constantly being shifted, managed and renegotiated during qualitative interviewing. This study highlights the politics of language which, when combined with other forms of power relations, such as the researcher’s perceived status, economic development of the MNCs’ home country and the participants’ organisational hierarchy, affect power distribution between the researcher and participants. Researchers often need to move from being an “insider” to an “outsider” and often to an “in-betweener” at different stages in an interview interaction to balance power.Originality/valueThis study contributes to international debates about the complex interplay of languages, politics and identity in multilingual and multicultural qualitative research. In contributing to these literatures, the authors focus on the relatively under-researched Chinese MNCs in other developing countries including Mongolia and Tanzania. Recommendations for researcher training and reflexivity are proposed.

The Practice and Future Development of Chinese Multinational Corporations in Relation to the Responsibility to Protect Human Rights

With the growing number of Chinese multinational corporations(MNCs) investing in foreign countries,fulfilling MNCs responsibility to protect human rights outside of China has become an urgent issue that needs to be addressed. Focusing on Chinese MNCs and analyzing their practices in human rights protection,discussing how Chinese MNCs can respect and safeguard local human rights while also considering their corporate interests and domestic regulations when investing overseas. Exploring ways to improve MNCs awareness and capacity for human rights protection,and offering suggestions for future development. Chinese MNCs must actively fulfill their responsibility to human rights during the process of overseas investment, and strive for common development between enterprises and local communities by enhancing internal management systems, strengthening cooperation with international organizations, and raising awareness of human rights protection. Moreover, analyzing the practices of Chinese MNCs from an empirical perspective, identifying existing problems and suggesting corresponding improvement. By examining relevant cases, it delves into the human rights protection responsibilities of Chinese MNCs in overseas investment and provides valuable insights for Chinese MNCs' cross-border investments.

The Impact of Anti-Dumping Measures on the Export of Intermediate Goods in Chinese Manufacturing Industry - Based on the perspective of ownership of importing firms

Abstract This paper links the OECD-ICIOMNE database with the OECD analytical AMNE database. Based on the ownership of importing countries' enterprises, it dissects the scale of intermediate product exports in the Chinese manufacturing industry. Furthermore, it combines this analysis with the Temporary Trade Barriers Database to explore the heterogeneous effects of anti-dumping measures on the scale of intermediate product exports. The study finds that: (1) The scale of intermediate product exports from the Chinese manufacturing industry to domestically owned enterprises in importing countries is higher than that to the third-country multinational corporations within the importing country, with the lowest scale observed for exports to Chinese multinational corporations located within importing countries' borders. (2) Under the impact of anti-dumping measures, the negative effect on the scale of intermediate product exports to domestically owned enterprises in importing country is greater than that on exports to the third-country multinational corporations within the importing country. However, exports to Chinese multinational corporations within importing countries' borders don’t experience a significant impact. (3) The endowment of factors in Chinese manufacturing industries and the regions to which importing countries belong will lead to heterogeneous impacts on the relationship between anti-dumping measures and the scale of intermediate product exports. Keywords: Scale of Intermediate Product Export, Importing Country, Domestically Owned Enterprise, Chinese Multinational Corporation, Third-country Multinational Corporation.

Chinese Overseas Foreign Direct Investment and Online Digital Freedom in Developing Countries

Although studies have shown China’s growing influence on developing countries’ policies, little empirical work has considered the relationship between Chinese overseas foreign direct investment (FDI) and host countries’ online digital freedom. Considering as many as 112 developing countries from 2003 to 2019, and using a two-stage least squares selection modeling approach, we find an association between Chinese FDI and four types of limits on online digital freedom. Conversely, when we substitute global FDI (excluding Chinese FDI), we obtain different results, suggesting there is something unique about Chinese multinational corporations and online digital freedom. Our research indicates that China and host states’ domestic leaders mutually benefit by restricting online digital freedom.

The impact of reverse knowledge transfers on exploitative and exploratory innovations in MNCs: The role of knowledge distance

This study investigates the impact of reverse knowledge transfers on the exploitative and exploratory innovations of multinational corporations (MNCs) and explores the moderating effect of knowledge distance between parent and subsidiary companies. Based on survey data from 197 Chinese MNCs, we found that internal-oriented knowledge transferred from subsidiaries facilitated exploitative innovations in the parent companies, while external-oriented knowledge had significant positive impacts on exploratory innovations. We also found that greater knowledge distance further promoted the parent company’s exploratory innovations, which were motivated by the transfer of external-oriented knowledge. Surprisingly, the moderating effect of knowledge distance on the relationship between reverse knowledge transfer and exploitative innovation was not significant. The consideration of knowledge and innovation types complemented the research on innovation development by MNCs in developing countries using external knowledge resources. This study also revealed that novel knowledge is the basis and key to the exploratory innovations of Chinese MNCs.

Technology Transfer from China to Kenya for Transport Infrastructure: The Case of International Trunk Roads

Literature on technology transfer to Africa is dominated by studies on agribusiness, military technology, information and communication technology, energy, climate change, health, and manufacturing, while it is scanty on others like transport infrastructure. In this article, we reviewed literature and carried out key informant interviews to collect data on technology transfer for Chinese-built roads in Kenya. Our objective was to examine the extent of technology transfer from Chinese multinational corporations to Kenyan institutions and organizations. We established that there was little technology transfer mostly because of Kenya’s internal obstacles such as inadequate absorptive capacity, weak competition culture, and weak legal and institutional frameworks on technology transfer. Multinational corporations transferred technology primarily to fulfil their commercial objectives and to meet the domestic labour training requirements. The technology transferred was not sufficient to simulate innovation and technology development in Kenya. We recommend reviewing Kenya’s legal and institutional frameworks on international technology transfer in order to improve the participation in and enforcement of technology transfer by government institutions.

JICIR Intercultural Theme Dialogue Chinese Multi-National Corporations (MNC’s): (Part I) Global Challenges and Opportunities

Abstract This article presents an in-depth exploration of the challenges and opportunities faced by Chinese Multi-National Corporations (MNCs) as they navigate the global business landscape. Focusing on the intercultural adaptation and communication barriers, it highlights the experiences of Chinese MNCs in various regions, including Africa and Pakistan. The discussion is based on a webinar panel featuring experts with diverse interdisciplinary backgrounds in intercultural business communication, intercultural management, international business, as well as international relation and economics. The insights from the panel address key themes and cross- and intercultural challenges such as dealing with differing leadership styles, communication barriers, cultural differences, corporate social responsibility (CSR), and the development of intercultural competence in diverse socio-cultural environments. The panelists emphasized the importance of flexibility, mutual understanding, and culturally agile leadership in overcoming these challenges. The discussion also outlines potential research areas for further exploration of the intercultural dynamics of Chinese MNCs. Through this dialogue, the article aims to stimulate future research and provide practical recommendations for improving the global operations and intercultural interactions of Chinese enterprises. It also proposes ideas on how Chinese MNCS can both develop and integrate local and global practices to achieve sustainable international growth.

SINO-AFRICA AND TECHNOLOGICAL TRANSFER: IMPLICATION ON SUSTAINABLE DEVELOPMENT IN NIGERIA

Technology is critical to industrialization and economic development of any nation and it is one of the serious bottlenecks in African industrialisation. There is no doubt that technology transfer is one of the less studied subjects in China-Africa relations. Foreign direct investment is an important factor for both technology transfer and economic growth in developing countries like Nigeria. Technological advancement has also become a major challenge to industrialization in Nigeria and to improve her economy, the Nigerian government had made various efforts at acquiring foreign technology to drive the development processes. The Nigerian government had signed pact with the Chinese government in critical areas such as agriculture, manufacturing, military, industry, education and other social sectors through Technological Transfer (TT) and Technical Cooperation (TC) that will aid knowledge sharing and transfer for the purpose of improving the economy. In view of this, the study examines the implication the Sino-Africa and technological transfer on sustainable development in Nigeria. The study employed the interpretivism philosophy and the qualitative approach was adopted in data collection and analysis. Secondary data were sourced from the United Nations Commodity Trade Statistics (UNCTS) Database, Nigeria National Bureau of Statistics, and the World Trade Organisation (WTO) Statistics database, Foreign Direct Investment (FDI) figures were from the United Nations Conference on Trade and Development (UNCTAD) Database, International Monetary Fund (IMF), and the United Nations Statistics Database (UNdata). Other sources were the International Monetary Fund (IMF) Database, International Financial Statistics (IFS) of the World Bank; publications of Central Bank of Nigeria (CBN) and other agencies of government as well as newspapers and journals. Also, key informant interviews were conducted with Chinese expatriates in Lagos and Ogun State, Nigeria. Data collected were analysed using content analysis method. Findings of the study reveals that there is no clear-cut policy statement on Sino-Africa technological transfer and knowledge sharing; thus, the Nigerian government cannot sufficiently absorb new technology from Chinese multi-national corporations as most of these corporations always come as agents of Foreign Direct Investment (FDI) or contractors. The study concludes that adaptation and implementation of policy on technological transfer cannot promote sustainable development in Nigeria. The study recommends among others that knowledge and technology transfer should form the basis of a regulatory framework of the national FDI policy. Also, there is need for the establishment of training institutes in each State of the federation so as to facilitate technological transfer. In addition, there should be collaboration between the established training institutes and higher institutions of learning so that students can have practical knowledge on advanced equipment, methodologies and technologies that will engender sustainable development in Nigeria within a decade.

CHILE: HOW TO BECOME AN ECONOMIC STAR OF THE PACIFIC REGION?

Chile is the state actor that became the regional power to be reckoned with despite a relatively small population and tense geopolitical relations with three neighbours – Argentina, Peru, and Bolivia, – while the pecularities of the national topography make the task of economic development considerably harder. Moreover, at the first sight, the dictatorship of Augusto Pinochet with its notorious repressions hardly could lure foreign investors. The article explains which commodities and services helped the country to reach one of the highest per capita levels in South America The authors focus on the specific features of Chile’s geopolitical location by highlighting key points of its political and economic interactions with Argentina, Bolivia, and Peru, and also identify important segments of the state’s tourism business which turn it into a significant point of cultural and tourist development in the Latin American region. In this vein, the importance of cooperation between Chile and other states in the region in the field of air transportation is emphasized, since this collaboration allows them to actually dominate the airspace and establish numerous tourist and cargo transportations. The importance of mining which allows Chile establishing cooperation with other regional actors in this sector is emphasized. In addition, the authors highlight the sphere of agriculture where Chilean farmers emphasize fishing, fruit growing and wine production, as well as the subsequent export of these goods abroad due to the small consumption capacity of the domestic market. Considering Chile’s foreign policy interactions with external partners, the authors stress the importance of cooperation with China and the US. These states are noted to have a significant influence on the development of the Chilean economy because they cooperate with it in all critically important sectors. However, the uncontrolled growth of Chinese import flows and the excessive presence of Chinese multinational corporations in the territory of Chile cause certain concerns both in Chile and on the part of the United States. Nevertheless, the authors conclude that the state’s balanced economic policy in the region allowed Chile to gain a worthy place in the economic structure of Latin American trade and increase the pace of its own development.

Foreign direct investment from Japan, South Korea and China in the Czech Republic: A comparative analysis

Multinational companies from Japan, South Korea and China began to actively penetrate Czech market starting from the mid-1990s. By 2021, Japan was the leader in terms of foreign direct investment stock in the Czech Republic ($ 4.7 billion), followed by South Korea ($ 3.4 billion); and China ($ 760 million). The methodological basis of the paper is Dunning’s eclectic paradigm, which makes it possible to explain foreign investment activities from the point of view of the simultaneous availability in these processes of ownership, location and internalization advantages. As a result of a comparative analysis, the author comes to the following conclusions. In the processes of activity of foreign affiliates of Asian companies in the Czech Republic (as part of the implementation of existing ownership advantages), the following features were identified: concentration on the main field of activity of the parent company; concentration of activity in those industries that are most developed in the Czech Republic (industry agglomeration effect); clustering of affiliates around the leading company and main activity; diversification of the activities of foreign affiliates by supplementing the main activities of the parent company with the activities in related sectors. To explain the weak presence of Chinese MNCs in the Czech market and the more deep activity of South Korean and Japanese MNCs, a “wedge-shaped” foreign market entry was proposed; it is based on the idea of internalization advantages of. The leading company represents a spearhead of the “wedge-shaped” foreign market entry. A large MNC possesses powerful and well-developed ownership advantages. It is the first to enter foreign market in the sector that is main one for its activity in the national market; and it is followed by foreign affiliates operating in the main and related sectors in a kind of expanding “wedge”. It is the penetration that enables MNCs to gain a foothold in the market, leveraging both ownership, location and internalization advantages.

Does global diversification promote or hinder green innovation? Evidence from Chinese multinational corporations

Green innovation plays a critical role in facilitating firms to achieve sustainable development. This study aims to investigate how global diversification affects green innovation. Existing literature suggests that global diversification can have both positive and negative effects on firms' engagement in green innovation. While it can increase firms' pressure and ability to participate in green innovation activities, thereby promoting their green innovation efforts, it can, however, be utilized to evade environmental responsibility, thereby hindering their green innovation efforts. In an empirical analysis focusing on a sample of Chinese multinational corporations (MNCs) from 2008 to 2020, MNCs' global diversification is found to affect their green innovation significantly and positively. Moreover, the positive effect of global diversification on green innovation is enhanced by factors, such as the host country's institutional quality, state ownership, and the CEO's academic experience. The findings suggest that global diversification can facilitate Chinese MNCs' engagement in green innovation activities rather than being utilized to evade environmental responsibility. Furthermore, the results reveal that the positive effect of global diversification on green innovation depends on the external and internal environments in which MNCs operate. Overall, this study provides new insight into the determinants of corporate green innovation in emerging market MNCs.

Earnings Management of Chinese Listed Multinational Corporations

AbstractThis study evaluates the quality of accounting information provided by Chinese multinational corporations (MNCs) in relation to the issue of earnings management. Using a combined dataset of outward foreign direct investment and financial statements by Chinese firms publicly listed on A‐share markets between 2012 and 2017, we investigate whether Chinese MNCs are more inclined to manage earnings. We discover that these firms exhibited significant earnings management behavior and typically adjusted their earnings downward. We demonstrate that these effects were more pronounced among private MNCs than state‐owned firms, and in host countries with weaker institutional quality. Further research reveals that after delaying the confirmation of current earnings, Chinese MNCs received higher government subsidies, and this pattern was particularly prevalent among private MNCs. We find no evidence that Chinese MNCs manipulated earnings to avoid paying taxes.