Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry

Peter Hertenstein (), Dylan Sutherland () and John Anderson ()
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Peter Hertenstein: University of Cambridge
Dylan Sutherland: Durham University
John Anderson: University of Northern Iowa

Asia Pacific Journal of Management, 2017, vol. 34, issue 1, No 4, 69-96

Abstract: Abstract We explore how the outward FDI strategies of Chinese auto component multinational corporations (MNCs) are shaped by sub-contracting supply relationships established with developed market MNCs. We argue the strong presence of foreign MNC business networks developed through prior inward FDI constitutes an important home country effect influencing the outward FDI strategies of emerging market MNCs. Using the updated internationalization process model, we show how commitment to business networks is a critical mechanism driving the internationalization trajectories of Chinese auto component MNCs. This includes geographic location choices to psychically distant developed markets, strategic asset seeking orientation, pace of internationalization, and entry mode decisions.

Keywords: Inward-outward FDI linkages; Business networks; Internationalization process model; Auto components; China (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (36)

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DOI: 10.1007/s10490-015-9422-3

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