Journal
ASIA PACIFIC JOURNAL OF MANAGEMENT
Volume 34, Issue 1, Pages 69-96Publisher
SPRINGER
DOI: 10.1007/s10490-015-9422-3
Keywords
Inward-outward FDI linkages; Business networks; Internationalization process model; Auto components; China
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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.
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