Transnational Corporations and ‘Obligated Embeddedness’: Foreign Direct Investment in China's Automobile Industry

Weidong Liu and Peter Dicken
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Weidong Liu: Institute of Geographical Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing, 100101, China
Peter Dicken: School of Environment and Development, University of Manchester, Manchester M13 9PL, England

Environment and Planning A, 2006, vol. 38, issue 7, 1229-1247

Abstract: With the aid of an empirical case study of the automobile industry in China, we explore how, under certain political–economic conditions, the investments of transnational corporations (TNCs) can be shaped to meet the state's objectives. We develop the concept of ‘obligated embeddedness’ to capture the dynamics of this process. We show that foreign direct investment in the automobile industry in China is a type of market-led and embedded investment which is characterised by joint ventures and the follow-up network configurations. However, to achieve such obligated embeddedness on the part of TNCs—and for the state and its citizens to gain its benefits—the state not only has to have the theoretical capacity to control access to assets located within its territory, but also the power actually to determine such access.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:38:y:2006:i:7:p:1229-1247

DOI: 10.1068/a37206

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