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

Hertenstein, P.; Sutherland, D.; Anderson, J.

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.

Citation

Hertenstein, P., Sutherland, D., & Anderson, J. (2017). Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry. Asia Pacific Journal of Management, 34(1), 69-96. https://doi.org/10.1007/s10490-015-9422-3

• Journal Article Type: Article
• Acceptance Date: Jun 12, 2015
• Online Publication Date: Aug 15, 2015
• Publication Date: Mar 1, 2017
• Deposit Date: Jun 18, 2015
• Publicly Available Date: Aug 15, 2016
• Journal: Asia Pacific Journal of Management
• Print ISSN: 0217-4561
• Electronic ISSN: 1572-9958
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 34
• Issue: 1
• Pages: 69-96
• DOI: https://doi.org/10.1007/s10490-015-9422-3
• Keywords: Inward-outward FDI linkages, Business networks, Internationalization process model, Auto components, China.
• Public URL: https://durham-repository.worktribe.com/output/1403305