What is 'Chinese' About Chinese Multinationals?

15 Pages Posted: 24 Apr 2018

See all articles by Ravi Ramamurti

Ravi Ramamurti

Northeastern University - D’Amore-McKim School of Business

Jenny Hillemann

Vrije Universiteit Brussel (VUB); University of Reading - Henley Business School

Date Written: November 2017

Abstract

Buckley et al.’s (J Int Bus Studi 38(4):499–518, 2007) pioneering work concluded that the determinants of outward foreign direct investment (OFDI) from China were similar to those observed in developed countries – but with a few modifications. In this commentary, we suggest continuing their effort to understand what is distinctive about Chinese multinational enterprises (CMNEs). We look for underlying explanations that are analytically useful and potentially generalizable, unlike a firm’s nationality, which is a catch-all variable with no analytical value. Based on prior research and Ramamurti (Glob Strategy J 2(1):41–47, 2012a), we argue that the following variables help explain distinctive aspects of CMNE internationalization: (1) their “stage of evolution as a multinational enterprise,” with most CMNEs being infant MNEs rather than mature MNEs; (2) the “global context for internationalization,” which has helped CMNEs internationalize faster than it was possible in earlier decades; (3) “government-created advantages,” which complemented China’s natural endowments and for the most part improved CMNEs’ international competitiveness; and (4) “leapfrogging advantage,” which allowed late-mover Chinese firms to gain a competitive advantage in smokestack industries and some sunrise industries. These variables may also explain the behavior of MNEs from other emerging economies and are therefore candidates for inclusion in general models of the internationalization process.

Keywords: internationalization, Chinese multinationals, emerging-market multinationals, stage of development as a multinational enterprise, global context for internationalization, government-created advantages (GCA), Decade Award

Suggested Citation

Ramamurti, Ravi and Hillemann, Jenny, What is 'Chinese' About Chinese Multinationals? (November 2017). Journal of International Business Studies, Vol. 49, Issue 1, 2017. Available at SSRN: https://ssrn.com/abstract=3161418 or http://dx.doi.org/10.1057/s41267-017-0128-2

Ravi Ramamurti (Contact Author)

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

Jenny Hillemann

Vrije Universiteit Brussel (VUB) ( email )

Pleinlaan 2
http://www.vub.ac.be/
Brussels, 1050
Belgium

University of Reading - Henley Business School ( email )

Greenlands
Reading, Henley on Thames RG6 6AH
United Kingdom

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