Rethinking the Literature on the Performance of Chinese Multinational Enterprises

Rugman, Alan M.; Nguyen, Quyen T K; Wei, Ziyi

Abstract

We synthesize the literature on Chinese multinational enterprises (MNEs) and find that much of the prior research is based on as few as a dozen case studies of Chinese firms. They are so case-internationalization. In an attempt to better relate theory with empirical evidence, we examine the largest 500 Chinese manufacturing firms. We aim to find out the number of Chinese manufacturing firms to be true MNEs by definition, and to examine their financial performance relative to global peers using the financial benchmarking method. We develop our theoretical perspectives from new internalization theory. We find that there are only 49 Chinese manufacturing firms to be true MNEs, whereas the rest is purely domestic firms. Their performance is poor relative to global peers. Chinese MNEs have home country bound firm-specific advantages (FSAs), which are built upon home country-specific advantages (home CSAs). They have not yet developed advanced management capabilities through recombination with host CSAs. Essentially, they acquire foreign firms to increase their sales in domestic market, but they fail to be competitive internationally and to achieve superior performance in overseas operations. Our findings have important strategic implications for managers, public policy makers, and academic research.

Citation

Rugman, A. M., Nguyen, Q. T. K., & Wei, Z. (2016). Rethinking the Literature on the Performance of Chinese Multinational Enterprises. Management and Organization Review, 12(2), 269-302. https://doi.org/10.1017/mor.2016.13

• Journal Article Type: Article
• Acceptance Date: Mar 13, 2016
• Online Publication Date: Jun 24, 2016
• Publication Date: 2016-06
• Deposit Date: Jan 23, 2020
• Publicly Available Date: Feb 28, 2020
• Journal: Management and Organization Review
• Print ISSN: 1740-8776
• Electronic ISSN: 1740-8784
• Publisher: Cambridge University Press
• Peer Reviewed: Peer Reviewed
• Volume: 12
• Issue: 2
• Pages: 269-302
• DOI: https://doi.org/10.1017/mor.2016.13
• Public URL: https://nottingham-repository.worktribe.com/output/3787289
• Publisher URL: https://www.cambridge.org/core/journals/management-and-organization-review/article/rethinking-the-literature-on-the-performance-of-chinese-multinational-enterprises/A39A125AF9BF748797AD1487FC6B87BA