Inertia versus mimicry in location choices by Chinese multinationals

International Marketing Review

Volumn 27, Issue 3, 2010, Pages 295-315

  Yuan, Lin ^a   Pangarkar, Nitin ^b  

^a UNIVERSITY OF MACAU   (Macao)

^b NATIONAL UNIVERSITY OF SINGAPORE   (Singapore)

Author keywords

China; Developing countries; Market system; Multinational companies

Indexed keywords

EID: 77952711222     PISSN: 02651335     EISSN: None     Source Type: Journal    
DOI: 10.1108/02651331011048005     Document Type: Article

References (91)

1. Ambrugey, T.L. and Miner, A.S. (1992), "Strategic momentum: the effects of repetitive, positional, and contextual momentum on merger activity" in Strategic Management Journal, Vol. 13, pp. 335-48.
2. Arregle, J.-L., Beamish, P.W. and Hebert, L. (2008), "The regional interdependence of FDI activity", Academy of International Business Proceedings, Milano, July.
3. Asia Monitor: South Asia Monitor (2007), "Inflation poses growing risks to stability" in Asia Monitor: South Asia Monitor, Vol. 13, No. 12, pp. 1-6.
4. Baum, J.A.C., Li, S.X. and Usher, J.M. (2000), "Making the next move: how experiential and vicarious learning shape the locations of chains' acquisitions" in Administrative Science Quarterly, Vol. 45, pp. 766-801.
5. Belberdos, R. and Carrcc, M. (2002), "The location of Japanese investments in China: agglomeration effects Keiretsu, and firm heterogeneity" in Journal of the Japanese and International Economies, Vol. 16, No. 2, pp. 194-211.
6. Blaise, S. (2005), "On the link between Japanese ODA and FDI in China: a microeconomic evaluation using conditional logit analysis" in Applied Economics, Vol. 37, pp. 51-5.
7. Boeker, W. (1989), "The development and institutionalization of subunit power in organizations" in Administrative Science Quarterly, Vol. 34, pp. 388-410.
8. Brouthers, L.E., O'Donnel, E. and Hadjinmarcou, J. (2005), "Generic product strategies for emerging market exports into triad nation markets: a mimetic isomorphism approach" in Journal of Management Studies, Vol. 42, No. 1, pp. 225-45.
9. Chadha, B., Masson, P.R. and Meredith, G. (1992), "Models of inflation and the costs of disinflation" in International Monetary Fund, Staff Papers, Vol. 39, No. 2, pp. 395-432.
10. Chan, C.M. and Makino, S. (2002), "Interorganizational imitation and foreign ownership strategy" in Cooperative Strategies and Alliances, Elsevier Science, Boston, MA, pp. 213-36.
11. Chang, S.-J. and Park, S. (2005), "Types of firms generating network externalities and MNCs' co-location decisions" in Strategic Management Journal, Vol. 29, pp. 595-615.
12. Chang, T.-L. and Grub, P.D. (1992), "Competitive strategies of Taiwanese PC firms in their internationalization process" in Journal of Global Marketing, Vol. 6, No. 3, pp. 5-27.
13. Child, J. and Rodrigues, S.B. (2005), "The internationalization of Chinese firms: a case for theoretical extension?" in Management and Organization Review, Vol. 1, pp. 381-410.
14. Chung, W. and Alcácer, J. (2002), "Knowledge seeking and location choice of foreign direct investment in the United States" in Management Science, Vol. 48, No. 12, pp. 1534-54.
15. de Soysa, I. and Neumayer, E. (2005), "False prophet, or genuine savior? Assessing the effects of economic openness on sustainable development, 1980-99" in International Organization, Vol. 59, pp. 731-72.
16. DiMaggio, P.J. and Powell, W.W. (1983), "The iron cage revisited: institutional isomorphism and collective rationality in organizational fields" in American Sociological Review, Vol. 48, pp. 147-60.
17. Eisenhardt, K. and Martin, J.A. (2000), "Dynamic capabilities: what are they?" in Strategic Management Journal, Vol. 21, (special issue), pp. 1105-21.
18. Fisher, S. and Modigliani, F. (1978), "Towards an understanding of the real effects and costs of inflation" in Weltwirtschaftliches Archiv., Vol. 4, pp. 810-33.
19. Froot, K.A. and Stein, J.C. (1991), "Exchange rates and foreign direct investment: an imperfect capital markets approach" in Quarterly Journal of Economics, Vol. 106, pp. 1191-217.
20. Fukao, K. and Yue, X. (1997), "Denki maker no richi sentaku("The location selection of Japanese electronic firms")", Mita Gakkai Zasshi, Vol. 90, No. 2.
21. Galan, J.I., Javier, G.-B. and Jose, A.Z.-V. (2007), "Factors determining the location decisions of Spanish MNEs: an analysis based on the investment development path" in Journal of International Business Studies, Vol. 38, pp. 975-97.
22. Gimeno, J., Hoskisson, R.E. and Beal, B.D. (2005), "Explaining the clustering of international expansion moves: a critical test in the US telecommunications industry" in Academy of Management Journal, Vol. 48, No. 2, pp. 297-319.
23. Grant, R.M. (1987), "Multinationality and performance among British manufacturing companies" in Journal of International Business Studies, Vol. 18, No. 3, pp. 79-89.
24. Greener, I. (2002), "Theorising path-dependency: how does history come to matter in organizations?" in Management Decision, Vol. 40, Nos 5/6, pp. 614-19.
25. Greve, R.H. (2000), "Market niche entry decisions: competition, learning, and strategy in Tokyo banking, 1894-1936" in Academy of Management Journal, Vol. 43, No. 5, pp. 816-36.
26. Guillen, M.F. (2002), "Structural inertia, imitation, and foreign expansion: South Korean firms and business groups in China, 1987-95" in Academy of Management Journal, Vol. 45, No. 3, pp. 509-25.
27. Hannan, M.T. and Freeman, J. (1977), "The population ecology of organizations" in American Journal of Sociology, Vol. 82, pp. 929-64.
28. Hannan, M.T. and Freeman, J. (1984), "Structural inertia and organizational change" in American Sociological Review, Vol. 49, pp. 149-64.
29. Hauschild, P.R. and Miner, A.S. (1997), "Models of interorganizational imitation: the effects of outcome salience and uncertainty" in Administrative Science Quarterly, Vol. 42, pp. 472-500.
30. Haveman, H. (1993), "Follow the leader: mimetic isomorphism and entry into new markets" in Administrative Science Quarterly, Vol. 38, No. 4, pp. 593-612.
31. Head, K., Ries, J. and Swcnson, D. (1995), "Agglomeration benefits and location choices: evidence from Japanese manufacturing investments in the US" in Journal of International Economics, Vol. 38, pp. 223-47.
32. Henisz, W. and Delios, A. (2001), "Uncertainty, imitation, and plant location: Japanese multinational corporations, 1990-1996" in Administrative Science Quarterly, Vol. 46, pp. 443-75.
33. Hodgson, A. (2007), "Mounting inflation in Argentina threatens business environment", available at: www.euromonitor.com/.
34. Hummel, J.R. (2007), "Death and taxes, including inflation: the public versus economists" in Economic Journal Watch, Vol. 4, No. 1, pp. 46-59.
35. Hymer, S.H. (1976), A Study of Foreign Direct Investment, MIT Press, Cambridge, MA.
36. Jansen, K.J. (2004), "From persistence to pursuit: a longitudinal examination of momentum during the early stages of strategic change" in Organization Science, Vol. 15, No. 3, pp. 276-94.
37. Khanna, T. and Palepu, K. (1997), "Why focused strategies may be wrong for emerging markets" in Harvard Business Review, July-August, pp. 41-51.
38. Khanna, T. and Rivkin, J.W. (2001), "Estimating the performance effects of business groups in emerging markets" in Strategic Management Journal, Vol. 22, No. 1, pp. 45-74.
39. Khanna, T., Palepu, K.G., Sinha, J., Klum, A., Kaji, N., Sanchez, L. and Yacoub, M. (2005), "Strategies that fit emerging markets" in Harvard Business Review, Vol. 83, No. 6, pp. 63-76.
40. Kotabe, M., Jiang, C.X.W. and Murray, J.Y. (2008), "Institutional relatedness, resources adquisition, and performance outcomes of Chinese multinational companies" in Academy of Management Proceedings, pp. 1-6.
41. Lall, S. (1983), The New Multinationals: The Spread of Third World Enterprises, Wiley, Chichester.
42. Latin America Monitor: Southern Cone Monitor (2007), "Inflation poses risks to growth outlook" in Latin America Monitor: Southern Cone Monitor, Vol. 24, No. 11, p. 5.
43. Lavie, D. and Rosenkopf, L. (2006), "Balancing exploration and exploitation in alliance formation" in Academy of Management Journal, Vol. 49, No. 4, pp. 797-818.
44. Leff, H.N. (1978), "Industrial organisation and entrepreneurship in the developing countries: the economic groups" in Economic Development and Cultural Change, Vol. 4, pp. 661-75.
45. Levitt, B. and March, J.G. (1988), "Organizational learning" in American Journal of Sociology, Vol. 14, pp. 319-40.
46. Lu, D. (2000), "Industrial policy and resource allocation: implications on China's participation in globalization" in China Economic Review, Vol. 11, No. 4, pp. 342-60.
47. Lu, J.W. (2002), "Intra- and inter-organizational imitative behavior: institutional influences on Japanese firm's entry mode choice" in Journal of International Business Studies, Vol. 33, No. 1, pp. 19-37.
48. Lu, J.W. and Beamish, P.W. (2004), "International diversification and firm performance: the S-curve hypothesis" in Academy of Management Journal, Vol. 47, No. 4, pp. 598-609.
49. Luo, Y. and Tung, R.L. (2007), "International expansion of emerging market enterprises: a springboard perspective" in Journal of International Business Studies, Vol. 38, No. 4, pp. 481-98.
50. McFadden, D. (1973), "Conditional logit analysis of qualitative choice behavior" Zaremka, P. (Ed.), Frontiers in Econometrics, Academic Press, New York, NY.
51. Mair, J., Martí, I. and Canly, K. (2007), "Institutional voids as spaces of opportunity" in European Business Forum, Vol. 31, pp. 34-9.
52. Makki, S.S. and Somwaru, A. (2004), "Impact of foreign direct investment and trade on economic growth: evidence from developing countries" in American Journal of Agricultural Economics, Vol. 86, No. 3, pp. 795-801.
53. March, J. (1991), "Exploration and exploitation in organizational learning" in Organization Science, Vol. 2, No. 1, pp. 71-87.
54. Markides, C.C. and Williamson, P.J. (1994), "Related diversification, core competencies, and corporate performance" in Strategic Management Journal, Vol. 15, (special issue), pp. 149-65.
55. Menard, S. (1995), Applied Logistic Regression Analysis, Sage, Thousand Oaks.
56. Menard, S. (2004), "Six approaches to calculating standardized logistic regression coefficients" in The American Statistician, Vol. 58, No. 3, pp. 218-23.
57. Meyer, J.W. and Rowan, B. (1977), "Institutionalized organizations: formal structure as myth and ceremony" in American Journal of Sociology, Vol. 83, pp. 340-63.
58. Miller, S.M. and Upadhyay, M.P. (2002), "Total factor productivity, human capital, and outward orientation: differences by stage of development and geographic regions", University of Nevada, Las Vegas, NV, Working Paper No. 2002-33, Department of Economics.
59. Mmieh, F. and Owusu-Frimpong, N. (2004), "State policies and the challenges in attracting foreign direct investment: a review of the Ghana experience" in Thunderbird International Business Review, Vol. 46, No. 5, pp. 575-99.
60. Monkiewicz, J. (1986), "Multinational enterprises of developing countries: some emerging trends" in Management International Review, Vol. 26, No. 3, pp. 67-79.
61. Nachum, L. (1999), "Diversification strategies of developing country firms" in Journal of International Management, Vol. 5, No. 2, pp. 115-40.
62. Nachum, L. (2004), "Geographic and industrial diversification of developing country firms" in Journal of Management Studies, Vol. 41, No. 2, pp. 274-94.
63. Newman, K.L. (2000), "Organizational transformation during institutional upheaval" in Academy of Management Review, Vol. 25, pp. 602-19.
64. North, D.C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge University Press, New York, NY.
65. OECD (1999), "Open markets matter: the benefits of trade and investment liberalization", available at: www.oecd.org.
66. Osland, G. and Bjorkman, I. (1998), "MNC-host government interaction: government pressures on MNCs in China" in European Management Journal, Vol. 16, No. 1, pp. 91-100.
67. Pacheco-López, P. (2005), "Foreign direct investment, exports and imports in Mexico" in World Economy, Vol. 28, No. 8, pp. 1157-72.
68. Pally, T.I. (1998), "Challenging open markets" in New Economy, Vol. 5, No. 4, pp. 238-442.
69. Park, S.H. and Luo, Y.D. (2001), "Guanxi and organizational dynamics: organizational networking in Chinese firms" in Strategic Management Journal, Vol. 22, No. 5, pp. 455-78.
70. Prasad, A.J. (1985) in Pros and Cons of Third World Multinationals: A Case Study of India, J.C.B. Mohr, Tubingen, p. 125.
71. Qian, G.M., Li, L., Li, J.L. and Qian, Z.M. (2008), "Regional diversification and firm performance" in Journal of International Business Studies, Vol. 39, pp. 197-214.
72. Rugman, A.M. and Brain, C. (2003), "Multinational enterprises are regional, not global" in The Multinational Business Review, Vol. 11, No. 1, pp. 3-12.
73. Rugman, A.M. and Verbeke, A. (2004), "A perspective on regional and global strategies of multinational enterprises" in Journal of International Business Studies, Vol. 35, No. 1, pp. 3-18.
74. Sanders, W.M.G. and Carpenter, M.A. (1998), "Internationalization and firm governance: the roles of CEO compensation, top team composition, and board structure" in Academy of Management Journal, Vol. 41, pp. 158-78.
75. Sayek, S. (2000), "Inflation and foreign direct investment: theory and evidence", University of St Andrews, St Andrews, paper presented at the Royal Economic Society's 2000 Annual Conference.
76. Schneider, F. and Frey, B. (1985), "Economic and political determinants of foreign direct investment" in World Development, Vol. 13, No. 1, pp. 61-75.
77. Tahir, R. and Larimo, J. (2004), "Understanding the location strategies of the European firms in Asian countries" in Journal of American Academy of Business, Vol. 5, Nos 1/2, pp. 102-9.
78. Tahir, R. and Larimo, J. (2005), "Understanding the strategic motivations of Finnish manufacturing FDIs in emerging Asian economies" in Asian Business & Management, Vol. 4, No. 3, pp. 293-313.
79. Teece, D.J., Pisano, G. and Shuen, A. (1997), "Dynamic capabilities and strategic management" in Strategic Management Journal, Vol. 18, pp. 509-33.
80. Ulgado, F.M., Yu, C.-M. and Negandhi, A.R. (1994), "Multinational enterprises from Asian developing countries: management and organizational characteristics" in International Business Review, Vol. 3, No. 2, pp. 123-33.
81. Urata, S. and Kawai, H. (1998), The Determinants of the Location of Foreign Direct Investment by Japanese Small and Medium-sized Enterprises, The EPA Economic Research Industry, Tokyo.
82. Vanhonacker, W.R. (2004), "Guanxi networks in China" in China Business Review, Vol. 31, No. 3, pp. 48-53.
83. Venkata Ratnam, C.S. (1998), "Multinational companies in India" in The International Journal of Human Resource Management, Vol. 9, No. 4, pp. 568-89.
84. Vernon-Wortzel, H. and Wortzel, L.H. (1988), "Globalizing strategies for multinationals from developing countries" in Columbia Journal of World Business, Vol. 23, No. 1, pp. 27-35.
85. Waguespack, D.M., Birnir, J.K. and Schroeder, J. (2005), "Technological development and political stability: patenting in Latin America and the Caribbean" in Research Policy, Vol. 34, pp. 1570-90.
86. Wikipedia (2009), "Inflation", available at: http://en.wikipedia.org/wiki/Inflation.
87. Yeung, H.W.-C. (1994), "Third world multinationals revisited: a research critique and future agenda" in Third World Quarterly, Vol. 15, No. 2, pp. 297-317.
88. Zhao, H. and Zhu, G. (2000), "Location factors and country-of-origin differences: an empirical analysis of FDI in China" in Multinational Business Review, Vol. 8, No. 1, pp. 60-73.
89. Zollo, M. and Winter, S. (2002), "Deliberate learning and the evolution of dynamic capabilities" in Organization Science, Vol. 13, No. 3, pp. 339-51.
90. Hejazi, W. (2007), "Reconsidering the concentration of US MNE activity: is it global, regional or national?" in Management International Review, Vol. 47, pp. 5-27.
91. Khanna, T. and Palepu, K.G. (2000), "The future of business groups in emerging markets: long-run evidence from Chile" in Academy of Management Journal, Vol. 43, No. 3, pp. 268-85.