Chinese Multinational Corporations Research Articles

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.

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.

Who Will Serve the Reputationally Compromised Boards? Politicians’ Appointment to the Boards of Chinese MNCs in the US

The appointment of politicians to the corporate boards has long been recognized as an important strategy for multinational corporations (MNCs) to navigate the institutional challenges in foreign markets. While extant scholarship acknowledges the firm’s needs in the foreign markets that are served by the resources possessed by the politician, there is limited understanding of a politician’s considerations in a politician’s appointment decision. In this study, we consider both firms’ and politicians’ perspectives and theorize the appointment of politicians to the boards as a mutual selection process in which both firm and politician select each other. Emerging markets multinational corporations (EMNCs) suffer severe legitimacy challenges in developed countries due to the liability-of-origin, therefore, EMNCs are more motivated to bring-in politician directors with high political capital to overcome their legitimacy challenges, but these politicians may not join the EMNCs due to the potential reputational loss of associating with EMNCs. Using politician-year level dataset of politician director appointments made by Chinese MNCs operating in the United States, our Cox hazard regression results find an inverted U-shape relationship between a politician’s political capital and his/her likelihood of joining the board of Chinese MNCs. As such, a politician having a moderate level of political capital is more likely to join the board of a reputationally compromised foreign MNC. This relationship is moderated by firm ownership. Specifically, the effect is stronger when Chinese MNCs are state owned and weaker in the case of joint venture. Our study bears rich implications for theory and practice.

Challenges and improvement of National Security Clearance in M&A by Chinese MNCs

With the accelerated integration of the world economy and the gradual development of Chinas reform and opening-up, Chinese enterprises have been making outbound investments and cross-border mergers and acquisitions more frequently. In terms of the attitudes of countries around the world towards the entry of foreign capital, some countries welcome the entry of foreign capital. However, others restrict the cross-border M&A of foreign companies entering their countries for reasons of domestic resource, technology and industrial protection, or to protect the interests of their national industries. From the recent development trend, the national security of foreign capital is especially cleared. Hence, this paper mainly studies the national security clearance system of cross-border M&A in the United States and other developed Western countries through literature analysis and comparative analysis. It also tries to summarize the characteristics and rules from them in the light of China's national conditions, supplemented by systematic research on cases of failed cross-border M&A by Chinese enterprises that encountered national security. Based on this, it will be very beneficial to the future cross-border M&A activities of Chinese enterprises, laying a good foundation for Chinese enterprises in the world M&A field in the future.

Legal Dilemmas in the Regulation of Mergers and Acquisitions of Chinese Multinational Corporations in the Context of Comparative Law and its Response

The global economy is in a sustained recession due to the impact of the new epidemic. As one of the few economies 'bucking the trend', Chinese companies have been presented with new opportunities to invest and merge overseas. However, decades after the 'going out' strategy was implemented, China still suffers from over-regulation, lack of regulations and inadequate protection for its cross-border Mergers and Acquisitions companies, resulting in frequent failures. How to address the risks of overseas Mergers and Acquisitions by Chinese companies from a national perspective is an urgent issue. This paper compares Chinese Mergers and Acquisitions regulations with those of other countries and examines the problems, causes, advantages of other countries and solutions for China. It is concluded that "imperfect legal norms", "restrictions between China and other countries" and "lack of fluent legal information on enterprises" are the factors that lead to the problems. The reason for this is that China is an emerging market economy that lacks the time to accumulate experience and improve. Through this analysis, recommendations are made to the Chinese government to improve regulations, taxes and remedies.

The Current Situation and Insights of Human Rights Due Diligence Implementation in Chinese Multinational Enterprises: The Case Study of Zhejiang Huayou Cobalt Co., Ltd.

In the global cobalt supply chain, the illegal employment of child labor by multinational companies is a very common phenomenon, and child laborers are often exposed to poor working conditions, which are extremely harmful to their physical and mental health. And behind these phenomena, it indicates that the international community has not been successful in ensuring adequate implementation of human rights due diligence for multinational corporations. This paper will take the supply chain human rights crisis and response measures of Zhejiang Huayou Cobalt Co., Ltd. in China as an example, and use case study method and literature research method to explore the current situation and insights of human rights due diligence implementation in Chinese multinational enterprises. It has been discovered through research that Chinese multinational corporations face several challenges in carrying out human rights due diligence, such as the lack of an institutionalized human rights due diligence mechanism and insufficient understanding of human rights risks. Based on this, this paper proposes the following recommendations: accelerating the formulation of human rights due diligence standards and norms; bridging the gap between domestic and foreign mandatory human rights due diligence laws; raising the awareness of human rights protection within enterprises; and strengthening human rights risk management in the supply chain.

China’s adherence to corporate social responsibility in Angola and the Democratic Republic of Congo: A comparative analysis

Background: China’s international relations with Africa have recently received much attention from the community of international relations scholars and practitioners. Even though such a scholarly conversation has become a hot topic, little attention has been paid to the Chinese multinational corporations’ (MNCs) adherence to and practice of corporate social responsibilities in African countries like Angola and the Democratic Republic of Congo (DRC).Aim: This study aims to provide a comprehensive analysis of China’s corporate social responsibility (CSR) engagements in both Angola and DRC.Setting: Based on historical sensibility, this research article uses Zambia’s political and economic fertile grounds to revisit what drives the Chinese engagement in Zambia within a historical context.Methods: Methodologically, this research article has deployed the use of document review to assemble the data used.Results: This article has discovered that China has not been adhering to the international norms and expectations of CSR in both countries.Conclusion: China’s international relations with Africa, Angola and the DRC in context do not at all serve the interests of Africans but those of China.Contribution: This article has contributed in terms of bringing an awareness among Africans about the conduct of China and her multinational corporations in the continent. This will then deepen the current scholarly conversation on an urgent need for policy transformation in Angola and the DRC when it comes to matters of CSR.

Organizational Commitment of Five Working Groups of MNCs

Purpose - The purpose of this study is to confirm that five different working positions show different Organizational Commitment (OC) and factors influencing OC levels in the Chinese MNCs.
 Design/methodology/approach - The study collected data of 326 employees in different positions in Chinese MNCs abroad and in domestic country. To test hypotheses, ANOVA analysis and linearity regression are used with SPSS 26 and AMOS 26 software on the collected data.
 Findings - Results shows that different working groups do not show significant difference of AC and CC level. However, there are significant difference of NC among the five groups in the Chinese MNCs. Employee's position and marital status are positively related to CC and NC. Tenure is positively related to AC.
 Research implications or Originality - Our research offers insight for further research direction on OC difference research. It provides implication for Chinese MNCs to consider more about strategies how to stimulate host country employee's normative commitment.

The relationality of parts for narrative identity constitution in the corporate profile translations of China’s multinational corporations

The corporate profile translations of multinational corporations (MNCs) in emerging economies such as China possess rich information for narrative analysis. Nevertheless, how the parts of a corporate profile translation form a whole narrative remains undertheorized. This study, therefore, examines the relationality of parts in the corporate profile translations of China’s MNCs by integrating William Labov’s narrative structure with Margaret Somers’ narrative identity theory. Specifically, we conduct a theoretical thematic analysis of how constituents form a whole narrative in relevant corporate profiles, of the shifts in the relationality of parts from the Chinese source texts (STs) to the English target texts (TTs) of these profiles, and of the influences of these shifts on the constitution of corporate identities in the target texts. Our results show that in the corporate profiles of Chinese MNCs, episodes are not randomly selected and related to each other but follow predominant patterns. However, we find no unified patterns in the shifts in the relationality of parts via the corporate profile translation of China’s MNCs. We thus reveal how corporations’ identities are constituted in diverse ways that reflect their fluid and unique features. Accordingly, our findings have implications for translation studies and corporate communications.

Political power shift in host markets and firm asset retrenchment: Evidence from Chinese MNCs

In this study, we examine how a shift in political power in host markets impacts the asset retrenchment decision of multinational firms. Drawing on the insights of resource-based, institutional and information asymmetry perspectives, we argue that political power transition increases the firm’s likelihood of asset retrenchment. Using Cox proportional hazard model on the sample of Chinese infrastructure industry firms, operating in 26 countries, we find a positive relationship between the shift in political power in the host market and firm’s likelihood of asset retrenchment. This relationship is found to be weaker when firms have prior experience operating in an institutionally similar environment, and the host country has higher economic dependence on the home country. We further examine the ‘policy uncertainty’ and ‘obsolescence of relational capital’ as possible channels through which a shift in political power may lead firms to retrench. We find support for the effectiveness of both channels.

Study on Environmental Responsibility of Multinational Corporations in International Investment under the “One Belt, One Road”

The importance of multinational firms on the growth of the global economy has been generally acknowledged by the international community under the background of global investment. However, the investment process’s negative influence on the environment of the host country is often not taken into account. With the growing conflict between international investment and environmental protection, it is urgent to explore how to make multinational corporations bear environmental responsibilities. In order to explore how to improve the environmental responsibility of Chinese multinational corporations in International Investment, this paper is based on the “One Belt, One Road”, and analyzes the existing international legal regulations, the environmental responsibilities of multinational corporations, and the challenges faced by multinational corporations in taking the environmental responsibility. The analysis leads to the conclusion that the issue of environmental protection should be addressed by increasing social responsibility among multinational corporations as well as by enhancing the system for international investment litigation and improving the content of already-existing international investment agreements with regard to environmental protection obligations. This will help Chinese multinational corporations to address environmental protection issues in their overseas investments under the “One Belt, One Road”.

Towards Examining the Link Between Green HRM Practices and Employee Green in-Role Behavior: Spiritual Leadership as a Moderator.

Grounding on the supplies-values fit theory, this study examines the effect of green HRM practices on an employee's in-role green behavior after the Covid-19 pandemic. Moreover, this study examined the mediating role of psychological green climate between green HRM practices and in-role green behaviour. In addition, we studied that spiritual leadership as a buffering mechanism strengthens the relation between psychological green climate and employee in-role behavior. The paths were examined using hierarchical multiple regression and for moderation mediation, we used PROCESS Hayes (2003) to evaluate the data collected from 374 Chinese MNCs employees. The findings indicate that green HRM practices have a positive effect on employees' in-role green behaviour. In addition, psychological green climate mediates the relation between green HRM practices and employee in-role green behavior. Spiritual leadership influences the strength of the moderated mediated path between green HRM practices and employee in-role green behavior (through a psychological green environment). The most apparent manifestation of green HRM practices is the integration of environmental concerns into traditional HRM processes after Covid-19 pandemic, including hiring, training, evaluating performance, and distributing pay and benefits. These green-focused management initiatives are more likely to result in employees acting greenly.

Specifics of activities of China's transnational corporations on world markets

Modern Chinese transnational corporations act as leaders in the world markets and have all the prospects for development. Today, the Chinese government seeks to change the status of the country from 'industrial" to "innovative". so it creates an optimal economic atmosphere for work in the country and in cooperation with other countries. China is strengthening its position in the innovation environment through its contribution to R&D and the development of the digital economy. The subject of the study are all aspects of Chinese TNCs’ production, innovation, investment, which make them successful operation on world markets. The aim of the study is to investigate the specifics of TNC activity, to evaluate how Chinese TNCs function in global markets. The objective: to consider the theoretical and methodological basis of the study of transnationalization in the world economy; to determine the essence and principles of the activities of transnational corporations, to study the specifics of the emergence and development of transnational corporations in China; to determine the current state and development prospects of China's TNCs on world markets. The research methodology is based on the application of a systematic analysis of the activities of transnational corporations, statistics and the historical-theoretical background of the emergence of TNCs, as well as the use of abstract research methods, expert assessments, correlation - regression analysis and economic analysis. Results: in this article, based on economic analyses, the role of China’s transnational corporations was assessed, and several priority development areas were identified. Conclusions: Most of China's multinational companies are among the top 500 of Fortune Global 500 and top 100 list of Forbes . Chinese multinational corporations use various strategies to increase competitiveness, especially "mergers and acquisitions", expanding not only the scale of production, but also the spheres of activity. Based on this, it can be concluded that Chinese TNCs have significant prospects for development and leadership in world markets.

The Moderating Effect of Cross-Cultural Psychological Adaptation on Knowledge Hiding and Employee Innovation Performance: Evidence from Multinational Corporations

This study explores the effects of three dimensions of knowledge hiding: evasive hiding (EH), rationalized hiding (RH), and playing dumb (PD), on employee innovation performance in multinational corporations. Additionally, the moderating effects of cross-cultural psychological adaptation on the above relationships are analyzed. In terms of the empirical analysis, corresponding assumptions were investigated with a sample of 273 respondents from Chinese multinational corporations in different industries and regions. The research findings show that EH and PD significantly negatively impact employee innovation performance in multinational corporations. In contrast, RH has a significant positive impact on the latter. Notably, cross-cultural psychological adaptation weakens the negative relationship between EH, PD and employee innovation performance, while strengthening the positive relationship between RH and employee innovation performance in multinational corporations. This study provides a new perspective for understanding the internal relationship between knowledge hiding and employee innovation performance. It comprehensively reveals the impact mechanism of knowledge hiding on innovation performance at the individual level by exploring the boundary effect of cross-cultural psychological adaptation. This study expands the literature on knowledge management and innovation on the theoretical side. On the other hand, this study suggests that RH may improve the employee innovation performance of multinational corporations, and provides a potential research direction for predicting the positive consequences of employees’ knowledge-hiding behavior. On the management side, this study offers practical guidelines for the human resource management of multinational corporations. Managers can promote cooperation and innovation among colleagues with cultural differences in home and host countries by improving employees’ cross-cultural psychological adaptability, thus improving employee innovation performance.

CEO characteristics, multinationality and downside risk: evidence from Chinese multinational corporations

PurposeReal options theory posits that multinationality provides additional operating flexibility and helps firms reduce downside risk. This study aims to explore the effects of chief executive officer (CEO) characteristics on the downside risk implication of multinationality in Chinese multinational corporations (MNCs).Design/methodology/approachThis study gathers a sample of Chinese MNCs from 2009 to 2020 and deploys a Tobit panel estimation model with fixed effects in the empirical analysis.FindingsThis study finds that multinationality has a significant negative effect on downside risk. The downside risk reduction effect of multinationality is stronger in firms led by older CEOs, women CEOs, CEOs with overseas experience or broader functional backgrounds or those with higher educational levels. Additionally, the above effects of CEO characteristics on the downside risk reduction effect of multinationality are more pronounced in firms with smaller top management team (TMT) sizes. Hence, the findings show that the multinational network constructed by Chinese MNCs could offer great operating flexibility, and CEO characteristics and the CEO–TMT interface play an important role in achieving real options flexibility from multinationality.Originality/valueThis study shows that multinationality could be an effective way for emerging market firms to reduce business risk. This study helps identify CEO characteristics that are associated with real option performance and emphasizes that CEO personal attitudes and abilities could influence the real options flexibility obtained from multinationality. This study also contributes to the understanding of micro foundations in international business by focusing on the role of CEO characteristics and the CEO–TMT interface in the downside risk implications of multinationality.