Internationalization of Chinese Firms: In the Process of Economy Transition

He, Yan

4. Term

Economics and Business Administration (International Business Economics), Master

2014

2014-06-05

99 pages

The continuous growth of China’s economy in the past decades has drawn the world’s attention. In the meanwhile, Chinese firms, also supported by the government policy, are seeking international markets by going abroad. However, due to the special characteristic of China economy, e.g., transiting from planned to market economy, Chinese firms have experienced a different path (to most of western countries) in their internationalization. In this thesis, we investigate how Chinese firms, as latecomers from an emerging market, to integrate into the global market during the transitional period, explore the entry modes that Chinese firms have applied to, and look into the fundamental reasons for the phenomena. In this thesis, we discuss two different paths of internationalization for Chinese firms. The first one is the internationalization of staying at home market, which was the initial stage of internationalization. The other is going the global, which has taken place after many years’ experience accumulation through the internalization at home market. We have investigated the entry modes: the firms’ staying at home market is mainly through contract mode and investment mode, e.g., by contracting productions with foreign partners, by acquiring the advanced technologies, and by attracting inflow foreign direct investments; the firms’ going global is mainly through export and investment, such as product export, merging & acquisition, and Greenfield investment. In this thesis, we further investigate the reasons of the special internationalization paths using the qualitative data. We discuss it from macro-, meso-, and micro-perspective, and make the following conclusions: 1) the transition and governance of a planned economy to a market economy is the foundation of Chinese firms’ internationalization; 2) institutional and governmental policy is another other important factors that affects the firms’ internationalization; 3) As the latecomers, applying the catch up stratigies drives Chinese firms’ internalization at both domestic and global markets.

Internationalization ; Economy transition ; Chinese firms

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