Chinese Multinational Enterprises Research Articles

Exploring host and home country effects on industrial relations in Chinese multinational enterprises – Evidence from Ireland

This paper explores the industrial relations (IR) experiences of Chinese multinational enterprises (MNE) in Ireland, with particular focus on the impact of host and home country institutions on IR policies and practices. The study adopted a qualitative methodology of semi-structured interviews with managerial respondents from eight Chinese MNEs located in Ireland and personnel in other relevant public and private organisations. Our results indicate that host country IR institutions (e.g. trade unions, employment legislation and government support) largely explain the IR practices of Chinese MNEs in Ireland. This study also identifies home country effects mostly relating to a hierarchical managerial approach and the development of a culture of harmony and collaboration. Finally, our results also call attention to some emerging ‘convergence’ and ‘divergence’ between Chinese MNEs and other MNEs in Ireland in terms of their IR experiences and responses.

Implications of the Foreign Corrupt Practices Act for the Construction of Compliance Systems in Chinese Multinational Enterprises

Implications of the Foreign Corrupt Practices Act for the Construction of Compliance Systems in Chinese Multinational Enterprises

Research on Anti-Corruption in Overseas Investment of Chinese Multinational Enterprises

Research on Anti-Corruption in Overseas Investment of Chinese Multinational Enterprises

Expatriates’ boundary-spanning: double-edged effects in multinational enterprises

AbstractExpatriates typically perform boundary-spanning to address challenges related to functional, linguistic, and cultural variations within multinational enterprises (MNEs), which in turn influences their relationships with host-country employees. Integrating social capital and role theory perspectives, this study explores the relational dynamics between expatriates and host-country employees by developing a novel theoretical framework that examines the double-edged effects of expatriates’ boundary-spanning. We propose that expatriates’ boundary-spanning nurtures mutual trust between expatriates and host-country employees, further facilitating expatriates’ identification with subsidiaries and host-country employees’ identification with MNEs. On the other hand, we propose that boundary-spanning increases expatriates’ role stressors, causing expatriates’ emotional exhaustion and outgroup categorization by host-country employees. We further categorize expatriates’ boundary-spanning into three types (functional, linguistic, and cultural) and theorize about their varying effects on the cognitive and affective bases of mutual trust and on role stressors. With data from 177 expatriate–host-country coworker dyads in Chinese MNEs, our double-edged framework is generally supported. Our findings suggest that cultural boundary-spanning exhibits the strongest double-edged effect, while functional boundary-spanning shows asymmetric effects, with negative outcomes surpassing positive ones, and linguistic boundary-spanning demonstrates the weakest effect. This study offers realistic and comprehensive insights into expatriates’ boundary-spanning, particularly in expatriate–host-country employee relationships.

Navigating multiple institutional environments: institutional quality and the role of Belt and Road Initiative on location choice of Chinese MNEs

Purpose This study aims to explore the extent to which Chinese multinational enterprises (MNEs) rely on supranational institution – the Belt and Road Initiative (BRI) – versus host country institutional quality to navigate their foreign location choice. Design/methodology/approach This study uses a conditional logit regression model using a sample of 1,302 greenfield investments by Chinese MNEs in 54 BRI participating countries during the period 2011–2018. Findings The results indicate that as a supranational institution, the BRI serves as a substitution mechanism to address the deficiencies in institutional quality in BRI participating countries, thereby attracting Chinese MNEs to invest in those countries. In addition, the BRI’s substitution effect on host country institutional quality is more pronounced for large MNEs, MNEs in the manufacturing industry and MNEs in inland regions. Originality/value This study expands the understanding of the BRI as a supranational institution for MNEs from emerging markets and reveals its substitution effect on the host country institutional quality. Furthermore, it highlights that MNEs with diverse characteristics gain varying degrees of benefits from the BRI.

The Impact of Formal and Informal Institutional Distances on the Strategic Asset Seeking Motives of Chinese Multinational Enterprises: An Analysis of Patent and Trademark Acquisitions

This study was to examine the influence of specific contributory variables within formal versus informal institutional distances on the sub-motives of emerging-market multinational enterprises’ (EMNEs) strategic-asset seeking (SAS), in order to gain insights into the behaviours and motivations of increasing outward foreign direct investment (OFDI) from emerging economies like China. From a multinomial logistic regression analysis of both firm and macro-level data, it was found that private business groups (PBGs) were more likely to target and acquire firms with patents and trademarks. The findings also suggest that the informal cultural distance was significantly associated solely with the EMNEs’ motive for seeking companies with trademarks but no patents. The association between formal institutional distance with EMNEs’ SAS behaviours was not significant. The findings also revealed that certain sub-dimensions of formal and informal cross-national distance had significant effects on overseas specific SAS behaviours. These findings inform further exploration of determinants of EMNEs’ SAS behaviours and provide a more comprehensive understanding of EMNEs’ internationalization trends. This research contributes to the current literature on EMNEs and provides practical and managerial implications for EMNE decision-makers while investing abroad.

Which ‘globalisations’ explain the overseas expansion of Chinese multinational enterprises through city-networks?

This paper analyses the overseas expansion of Chinese multinational enterprises using city-network analysis, with the focus on identifying the ‘globalisations’ that influence Chinese firm expansion. Applying a stepwise regression model to explain the world city networks of Chinese multinational enterprises (CMNEs), we find that variables linked to political, infrastructural, economic and cultural attributes explain the overall network. We then analyse in detail the connectivities produced by CMNEs in four main economic sectors: advanced producer services (APS), general services (GS), manufacturing (MF) and building, energy and mining industry (BEM), finding evidence of multiple, overlapping globalisations across sectors. This conforms to intensive globalisation in APS, extensive globalisation in GS and MF, and politically oriented globalisation in BEM, driven largely by Belt and Road, and related initiatives. The state presence in CMNEs’ overseas expansions suggests that globalisation by firms is tied to state-led globalisation objectives in some contexts, which complements the narratives that cast firm-led globalisation as market-oriented and stateless.

Internationalization rhythm and innovation performance: The effects of internationalization speed, organizational slack, and competitive intensity

While studies show that different internationalization rhythms may result in differing financial performances or cost efficiencies, the relationship between internationalization rhythms and innovation performance remains underexplored. More importantly, the moderating role of speed on this relationship has not been examined, given the limits to how much expansion firms can absorb within a given period without jeopardizing operations and as time compression diseconomies may emerge with high-speed expansion. Here, we apply an absorptive capacity perspective to examine the moderating role of internationalization speed. Unbalanced panel data from Chinese multinational enterprises between 2008 and 2014 reveal a negative relationship between parent companies’ internationalization rhythm and innovation performance, with stronger effects under high internationalization speed. Meanwhile, this relationship weakens (strengthens) with increasing internal organizational slack (external competitive intensity).

The longer, the farther? The internationalization of Chinese firms

Purpose This study aims to explore the internationalization of multinational enterprises (MNEs) from China and aims to examine the relationship between Chinese MNEs’ duration of internationalization and export intensity, and the contingent roles of the home country government. Design/methodology/approach By extending the springboard theory with institutional and cost-benefit analyses, the authors elaborate a two-phase framework of internationalization to explain how Chinese MNEs develop their international business under the influences of the home country government. Furthermore, the authors apply the Heckman two-stage method based on a panel data set of 19,994 firm-year observations of Chinese listed firms in 2008–2018 to test the hypotheses. Findings The research findings demonstrate an inverted U-shape relationship between the duration of internationalization and the export intensity of MNEs from China. The export intensity of MNEs from China increases during the initial phase of internationalization, and decreases during the subsequent. A further study reveals that the inverted U-shape of Chinese non-SOEs is steeper than that of SOEs, and this moderating effect is more salient after the Belt and Road Initiative. These results highlight the influence of the home government through state ownership and policies on the inverted U-shaped relationship. Originality/value This study helps to refine the understanding of Chinese MNEs’ global expansion by addressing time as an explicit dimension and revealing the mechanism of state ownership and the home country governmental policy in the dynamic internationalization process.

Does the quality of bilateral investment treaties matter for outward foreign direct investment?

Bilateral investment treaties (BITs) have been attracting the attention of policymakers with an interest in hosting foreign direct investment (FDI) to promote economic growth. Studies on the impacts of BITs on FDI inflows have produced mixed results. Unlike many studies, this research considers the quality of BITs. The analysis of FDI locational choices of Chinese multinational enterprises reveals significantly positive impacts of high-quality BITs. Furthermore, BITs exhibit a significantly amplified influence on the FDI of multinational corporations upon their implementation, in contrast to when they are initially signed. Additionally, private enterprises are more inclined towards engaging in FDI with nations possessing high-caliber BITs than state-owned enterprises. These findings suggest policymakers prioritize the quality of BITs and guarantee a seamless transition into effect after their signing, rather than solely focusing on their establishment.

Is the relationship between institutional distance and subsidiary performance moderated by top management team? Evidence from Chinese multinational enterprises

Institutional distance is well-recognised as having a significant influence on MNE subsidiary performance in host countries. However, there is less clarity as to how the institutional distance is managed by top management teams of MNEs. Specifically, it is not known whether the previous work experiences of the top management team (TMT) can moderate how institutional distance impacts subsidiary performance. The purpose of our research is to address the research question, how do different work experiences among the TMT moderate the relationship between institutional distance and subsidiary performance? To empirically answer this question, we use a sample of 6119 Chinese MNE subsidiaries with 34,870 TMT managers. We apply ordinary least square (OLS) regression and bias-corrected and accelerated bootstrap (BCa) to the data. The results indicate that the strength of the negative relationship between institutional distance and MNE subsidiary performance is conditional on the different work experiences of the TMT. We show that the negative relationship between institutional distance and MNE subsidiary performance is strengthened with an increase in expatriates in the TMT who have home country work experience (β = −0.346, p < 0.05) but mitigated with an increase of managers in the TMT who have host country work experience (β = 0.129, p < 0.01). Additionally, the negative relationship between institutional distance and subsidiary performance is weakened by increasing diversity of TMT’s international experience (β = 0.555, p < 0.01). Notably, the TMT’s international experience in weak-institution markets has a more salient mitigating effect on the negative relationship than work experienced gained in strong-institution markets. This study contributes to the integration of TMT perspective into institutional management and has practical implications for the staffing strategy of MNE subsidiaries.

Geopolitical risk and foreign subsidiary performance of emerging market multinationals

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

Reverse knowledge transfer from subsidiaries to headquarters: Chinese firms in Africa

This study aims to identify the factors influencing the reverse knowledge transfer (RKT) of local market information from overseas subsidiaries to their multinational enterprise (MNE) headquarters. For this objective, this study uses both knowledge transfer capacity and relational capital as overarching theoretical concepts. Survey data are collected from Chinese MNEs operating in Africa, which is often referred to as an unknown ‘blue ocean’ economy. Results show that the components (i.e., knowledge development capabilities and possession of prior relevant knowledge) of knowledge transfer capacity increase relational capital. Specifically, knowledge development capabilities highly facilitate the overseas subsidiaries' RKT, and relational capital functions as a vehicle promoting such phenomenon. Findings can provide valuable theoretical contributions and practical implications to MNEs intending to enter ‘blue ocean’ markets.

Foreign subsidiary performance: social trust–entry fit

PurposeThis paper aims to study whether the adoption of an entry mode that fits the social trust level contributes to the improvement of foreign subsidiary performance.Design/methodology/approachThe authors used the Probit model, linear regression, strategic fit approach and instrumental variable regression. The sample was made up of 11,095 observations of Chinese multinational enterprises' foreign subsidiaries in 54 countries from 2005 to 2020.FindingsThe results suggest that a host country with a high level of social trust results in fewer difficulties for enterprises in gaining legitimacy, thus foreign subsidiaries are more likely to select the wholly owned entry mode. The results also show that the effect is contingent on the formal institutions of host countries. The results of the mechanism test suggest that social trust influences subsidiaries' entry mode choice by reducing information asymmetry, costs and uncertainty risks. This study further finds that selecting a fit entry mode based on social trust level substantially increases foreign subsidiary performance and this effect is more significant when multinational enterprises (MNEs) are state-owned enterprises (SOEs).Research limitations/implicationsThe main limitation of this paper is its only focus on foreign subsidiaries of Chinese MNEs, which may limit the generalizability of research findings.Originality/valueThis paper responds to the call for conducting more research on informal institutions. Findings highlight the critical role of informal institutions in helping foreign subsidiaries in gaining legitimacy in host countries and the essentialness of selecting a fit entry mode based on the informal institutions of host countries for the development of foreign subsidiaries.

Creating a greener future: the crucial role of green innovation and supply chain management in corporate sustainability.

One of the most pressing concerns today is how to improve green innovation and supply chain management for company sustainability. It has been discovered that inefficient supply chain management is a major barrier limiting eco-friendly innovation. The supply chain management process is crucial to a company's long-term viability, yet previous research barely scratched the surface of its significance. This article uses a resource-based view to investigate how integrating green innovation and organizational agility into the supply chain management process contributes to the long-term success of businesses. This study used a cross-sectional approach. Structured equation modeling was used to examine data collected through convenience sampling from 475 employees of Chinese multinational manufacturing enterprises. Green innovation helps smooth over the bumps on the road between supply chain management and sustainable business results. Green innovation and business sustainable performance also benefit from organizational agility, which was not shown to moderate this relationship. The study teaches that in today's knowledge-based economy, firms that invest in novel technologies and adopt greener strategies are better able to address sensitive issues like supply chain management and organizational agility and achieve long-term success. This research aims to provide light on the complex interconnections between supply chain management, green innovation, and the sustainable performance of businesses. The theoretical framework for the present research was validated by the occurrence of a positive association between these variables.

On the economic implications of international travel restrictions: Evidence from Chinese MNEs’ firm value

During the early stage of the COVID-19 pandemic, many countries and regions issued travel restrictions to prevent the spread of the virus. However, little is known about the impacts of such policy changes on individual businesses, particularly multinational enterprises (MNEs) that involved in business activities across countries. Drawing upon signaling theory and resource dependence theory, we find that the MNEs directly affected by travel restrictions experience significant reductions in shareholder value in both the short and long term. Furthermore, state ownership mitigates the negative effect of travel restrictions on MNEs, but having a large number of overseas subsidiaries and high-tech characteristics deepens the adverse effects caused by travel restrictions. These findings offer new research directions for international business scholars to explore the economic consequences of public policies resulting from global emergencies, and provide insightful lessons for managers to respond to international crises and for policymakers to develop future public policies.

Culture fit and employee engagement in foreign subsidiaries: Evidence from Chinese multinational enterprises in the United States

Engaging local employees in foreign subsidiaries has emerged as a critical concern for Chinese multinational enterprises (MNEs). This study employs the theoretical framework of culture fit to conduct an inductive multiple-case study of Chinese subsidiaries in the United States. We examine how culture fit between the organizational and societal levels is manifested through human resource management practices at the foreign subsidiaries of Chinese MNEs. Particularly, we demonstrate how culture fit or misfit influences the intellectual, social, and affective engagement outcomes of local employees at the individual level. This study extends the understanding of culture fit across multiple levels and its direct impact on employee engagement. The findings provide valuable managerial implications for global human resource managers to effectively engage their culturally diverse workforces.

Environmental policy vs. Environmental innovation: An examination of policies disclosure on sustainable development from stakeholder theory perspective

AbstractStudying environmental policy (EnP) and environmental innovation (EnI) is a crucial domain for addressing global challenges such as climate change, resource depletion, and pollution. It equips the corporates with the knowledge and tools to develop effective strategies, regulations, and technological advancements that can mitigate environmental impact and promote sustainable practices for the benefit of current and future generations. This study attempts to uncover the influence of both EnP and EnI toward sustainable development (SD) within three dimensions, that is, social aspect, economic aspect, and environmental aspect from Chinese multinational enterprises (MNEs). A total of 723 documents were considered for data analysis using the SEM method and SmartPLS tool. The outcomes of the study are found interesting and fruitful where firstly a positive connection between EnP and SD was affirmed within Chinese MNEs. Second, the study found a positive nexus between EnI and SD, respectively. The findings highlight the insights by demonstrating EnP and EnI can help attain ultimate output and can strengthen SD of the Chinese MNEs. Additionally, this study offers several thought‐provoking and useful managerial recommendations as well as implications for both theoretical and managerial issues. Moreover, some possible opportunities are reported for future researchers by assuming the current flaws to carry out more research both within the Chinese market and rest of the regions, worldwide.

The Impact of Bilateral Relations on Chinese Multinational Enterprises&amp;apos; Investment in Latin America

The Impact of Bilateral Relations on Chinese Multinational Enterprises&amp;apos; Investment in Latin America

Dealing with Trust Deficit and Liabilities of Foreignness in Host Countries: Chinese Multinational Enterprises in Australia

In the face of growing global tendencies of anti-globalization and de-globalization, emerging economy multinational enterprises (EMNEs) are suffering from a trust deficit and multiple liabilities of foreignness in leading economies. The purpose of this study is to empirically examine the coping strategies of EMNEs towards the challenging institutional environment in host countries. It adopts a qualitative approach, conducting longitudinal multiple cases studies among MNE subsidiaries and employing interviews as the main method of data collection. The findings reveal that EMNEs are not passive recipients of the adverse institutional environment and adopt institutional adaptation as the only response strategy. Given that a single strategy cannot be effective, they have developed both proactive and protective strategies to handle the multiple liabilities of foreignness and trust deficit. This study can help EMNEs gain a better understanding of the dominance effect and develop more effective measures to manage challenging institutional environments in host countries. Given that interactions between institutional environments and firm-level strategies of MNEs remain under-researched, this study advances understanding of strategies and behaviours of MNEs in host countries.