Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries

Journal of International Business Studies

Volumn 45, Issue 8, 2014, Pages 980-1004

  Li, Ming Hua ^a   Cui, Lin ^b   Lu, Jiangyong ^c  

^a Copenhagen Business School ^*  (Denmark)

^b AUSTRALIAN NATIONAL UNIVERSITY   (Australia)

^c Peking University   (China)

Author keywords

emerging markets countries economies; firm heterogeneity; institutional reform; internationalization; state owned multinationals

Indexed keywords

EID: 84908118775     PISSN: 00472506     EISSN: 14786990     Source Type: Journal    
DOI: 10.1057/jibs.2014.14     Document Type: Article

References (108)

1. Abubakar, M. 2010. Towards world class corporations. Presentation by the Indonesian Minister of State-Owned Enterprises, http://www.euromoneyconferences.com/downloads/Asia/2010/Indonesia10/SOE.pdf, accessed 15 October 2013.
2. Aguilera, R., Des ender, K., & Kabbach de Castro, L. 2012. A bundle perspective to comparative corporate governance. In T. Clarke, & D. Branson (Eds), The SAGE handbook of corporate governance. London: Sage Publications, pp. 379-405.
3. Ahmad, E., & Mansoor, A. 2002. Indonesia: Managing decentralization. IMF Working Paper, Fiscal Affairs Department and Independent Evaluation Office, Washington DC, 136(2
4. Aoki, M. 1 994. The contingent governance of teams: Analysis of institutional complementarity. International Economic Review, 35(3): 657-676.
5. Aoki, M., Jackson, G., & Miyajima, H. 2007. Corporate governance in Japan: Institutional change and organizational diversity. New York: Oxford University Press.
6. Aulakh, P. S., & Kotabe, M. 2008. Institutional changes and organizational transformation in developing economies. Journal of International Management, 14(3): 209-216.
7. Baker, W. E., & Sinkula, J. M. 1999. The synergistic effect of market orientation and learning orientation on organizational performance. Journa l of the Academy of Marketing Science, 27(4): 411-427.
8. Bartel, A. P., & Harrison, A. E. 2005. Ownership versus environment: Disentangling the sources of public-sector inefficiency. The Review of Econom ics and Statistics, 87(1): 135-147.
9. Boyer, R. 2012. A new epoch but still diversity within and between capitalisms: China in comparative perspective. In C. Lane, & G. Wood (Eds), Capitalist Diversity and Diversity within Capitalism: 32-67. London: Routledge.
10. Brouthers, K. D. 2002. Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 33(2): 203-221.
11. Bucheli, M., & Kim, M. Y. 2012. Political institutional change, obsolescing legitimacy, and multinational corporations. Management International Review, 52(6): 847-877.
12. Campbell, J. L. 2004. Institutional change and globalization. Princeton, NJ: Princeton University Press.
13. Caulfield, J. 2006. Local government reform in China: A rational actor perspective. International Review of Administrative Sciences, 72(2): 253-267.
14. Chien, S. S. 2006. Institutional innovations, asymmetric decentralization, and local economic development: A case study of Kunshan, in post-Mao China. Environment and Planning C: Government and Policy, 25(2): 269-290.
15. Child, J., & Rodrigues, S. 2005. The internationalization of Chinese firms: A case for theoretical extension? Management Organization Review, 1(3): 381-410.
16. Child, J., & Tse, D. K. 2001. China's transition and its implications for international business. Journal of International Business Studies, 32(1): 5-21.
17. Chung W.,Mitchell W.,Yeung B. (2003) Foreign direct investment and host country productivity: The American automotive component industry in the 1980s, Journal of International Business Studies 34 (2): 199-218.
18. Crouch, C. 2005. Capitalist diversity and change: Recombinant governance and institutional entrepreneurs. New York: Oxford University Press.
19. Cuervo, A., & Villalonga, B. 2000. Explaining the variance in the performance effects of privatization. Academy of Management Review, 25(3): 581-590.
20. Cui, L., & Jiang, F. 2012. State ownership effect on firms' FDI ownership decisions under institutional pre ssure: A study of Chinese outward-investing firms. Journal of International Business Studies, 43(3): 264-284.
21. Dacin, M. T., Goodstein, J., & Scott, W. R. 2002. Institutional theory and institutiona l change: Introduction to the special research forum. Academy of Management Journal, 45(1): 45-56.
22. DiMaggio, P. J. 1997. Culture and cognition: An interdisciplinary review. Annual Review of Sociology, 23(1): 263-287.
23. DiMaggio, P. J., & Powell, W. 1991. The new institutionalism in organizational analysis. Chicago: University of Chicago Press.
24. Di Minin, A., Zhang, J., & Gammeltoft, P. 2012. Chinese foreign direct investment in R&D in Europe: A new model of R&D internationalization? European Management Journal, 30(3): 189-203.
25. Doh, J. P. 2000. Entrepreneurial privatization strategies: Order of entry and local partner collaboration as sources of competitive advantage. Academy of Management Review, 25(3): 551-571.
26. Doh, J. P., Teegen, H., & Mudambi, R. 2004. Balancing private and state ownership in emerging markets' telecommunications infrastructure: Country, industry, and firm influences. Jour nal of International Business Studies, 35(3): 233-250.
27. Domadenik, P., Pra? nikar, J., & Svejnar, J. 2008. Restructuring of firms in transition: Ownership, institutions and openness to trade. Journal of International Business Studies, 39(4): 725-746.
28. Fitriningrum, A. 2008. SOEs towards a central or coordinated ownership unit. Indones ian Ministry of State-Owned Enterprises, http://www.oecd.org/daf/ca/corporategovernanceofstate ownedenterprises/44787681.pdf, accessed 15 October 2013.
29. Globerman, S., & Shapiro, D. 2009. Economic and strategic considerations surrounding Chinese FDI in the United States. Asia Pacific Journal of Management, 26(1): 163-183.
30. Gordon, K., & Tash, A. 2009. Foreign government-controlled investors and recipient country investment policies: A scoping paper. OECD Investment Division, Paris, France.
31. Greenwood, R., & Hinings, C. R. 1996. Understanding radical organizational change: Bringing together the old and the new institutionalism. Academy of Management Review, 21(4): 1022-1054.
32. Greenwood, R., Raynard, M., Kodeih, F., Micelotta, E. R., & Lounsbury, M. 2011. Institutional complexity and organizational responses. Academy of Management Annals, 5(1): 317-371.
33. Gupta, N. 2005. Partial privatization and firm performance. Journal of Finance, 60(2): 987-1015.
34. Hall, P. A., & Soskice, D. 2001. Varieties of capitalism: The institutional foundations of comparative advantage. Oxford: Oxford University Press.
35. Hall, P. A., & Taylor, R. 1996. Political science and the three new institutionalisms. Political Studies, 44(5): 936-957.
36. Hancke, B., Rhodes, M., & Thatcher, M. (Eds) 2007. Beyond varieties of capitalism: Conflict, contradiction, and complementarities in the European economy. Oxford: Oxford University Press.
37. Haveman, H., & Rao, H. 2006. Hybrid forms and the evolution of thrifts. American Behavioral Scientist, 49(7): 974-986.
38. He, W., & Lyles, M. A. 2008. China's outward foreign direct investment. Business Horizons, 51(6): 485-491.
39. Henisz, W. J., & Zelner, B. A. 2005. Legitimacy, Interest groups pressures, and change in emergent institutions: The case of foreign in vestors and host country governments. Academy of Management Review, 30(2): 361-382.
40. Inoue C.,Lazzarini S.,Musacchio A. (2013) Leviathan as a minority shareholder: Firm-level implications of state equi ty purchases, Academy of Management Journal 56(6):1775-1801.
41. Ishizuka, F. 2009. Vietnamese local state-owned enterprises (SOEs) at the crossroads: Implications of SOE restructuring at the local level. Japan External Trade Organization Working Paper, Chiba, Japan.
42. Jackson, G., & Deeg, R. 2008. Comparing capitalisms: Understanding institutional diversity and its implications for international business. Journal of International Business Studies, 39(4): 540-561.
43. Jaworski, B . J., & Kohli, A. 1993. Market orientation: Antecedents and consequences. Journal of Marketing, 57(3): 53-70.
44. Johanson, J., & Vahlne, J.-E. 1977. The internationalization process of th e firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1): 23-32.
45. Johanson, J., & Vahlne, J.-E. 2009. The Uppsala international ization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9): 1411-1431.
46. Khanna, P. 2012. The rise of hybrid governance. The Mckinsey Center for Government, http://www.mckinsey.com/features/government-designed-for-new-times/the-rise-of-hybrid-governance, accessed 18 May 2013.
47. Kim, H., Kim, H., & Hoskisson, R. E. 2010. Does market-oriented instituti onal change in an emerging economy make business group-affiliated multinationals perform better? An institutionbased view. Journal of International Business Studies, 41(7): 1141-1160.
48. Kim, W., Nam, I. C., & Cuong, T. T. 2010. On the governance of state-owned economic groups in Vietnam, http://papers.ssrn. com/sol3/papers.cfm?abstract-id=1729093&download=yes, accessed 18 May 2013.
49. Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1): 64-81.
50. Kowalski, P., Bü ge, M., & Egeland, M. 2013. State-owned enterprises: Trade effects and policy implications. OECD Trade Policy Paper, No. 147, Paris, France.
51. Lane, C. 2005. Institutional transformation and system change: changes in the corporate governance of German corporations. In G. Morgan, R. Whitley, & E. Moen (Eds), Changing capitalisms? Complementarities, contradictions and capability development in an international context: 78-109. New York: Oxford University Press.
52. Lane, C., & Wood , G. 2009. Capitalist diversity and diversity within capitalism. Economy and Society, 38(4): 531-551.
53. Lane, C., & Wood, G. 2012. Capitalist diversity and diversity within capitalism. London: Routledge.
54. Li, P., & Meyer, K. E. 2009. Contextualizing experience effects in international business: A study of ownership strategies. Journal of World Business, 44(4): 370-382.
55. Lin, J. Y.,&Liu, Z. 2000. Fiscal decentralization and economic growth in China. Economic Development & Cultural Change, 49(1): 1-21.
56. Lipsey, R.E. 2004. Home and host country effects o n foreign direct investment. In R. Baldwin, & A. Winters (Eds), Challenges to globalization: Analyzing the economics: 333-382. Chicago: University of Chicago Press.
57. Liu, X., Lu, J., & Chizema, A. 2014. Top executive compensation, regional institutions and Chinese OFDI. Journal of World Business, 49(1): 143-155.
58. Lu, J. 2002. Intra-and inter-organizational imitative behavior: Institutional influences on Japanese firms' entry mode choice. Journal of International Business Studies, 33(1): 19-37.
59. Lu, J., & Xu, D. 2006. Growth and survival of international joint ventures: An external-internal legitimacy perspective. Journal of Management, 32(3): 426-448.
60. Luo, Y. D., & Tung, R. L. 2007. International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4): 481-498.
61. Luo, Y., Xue, Q., & Han, B. 2010. How emerging market governments promote outward FDI: Experience from China. Journal of World Business, 45(1): 68-79.
62. Ma, X. F., Yao, X. T., & Xi, Y.M. 2006. Business group affiliation and firm performance in a transition economy: A focus on ownership voids. Asia Pacific Journal of Management, 23(4): 467-483.
63. Ma, X. F., Tong, T. W., & Fitza, M. 2013. How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 Corporations' investment in China. Journal of International Business Studies, 44(1): 66-87.
64. Malesky, E. J. 2008. Straight ahead on red: How foreign direct investment empowers subnational leaders. Journal of Politics, 70(1): 97-119.
65. Malesky, E. J. 2009. The Vietnam provincial competitiveness index: Measuring economic governance for private sector development. Vietnam Chamber of Commerce and Industry Policy Paper, No. 14, Hanoi, Vietnam.
66. Mathews, J. A., & Zander, I. 2007. The international entrepreneurial dynamics of accelerated internationalisation. Journal of International Business Studies, 38(3): 387-403.
67. Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2): 340-363.
68. Meyer, K. E., & Nguyen, H. 2005. Foreign investment strategies and sub-national institutions i n emerging markets: Evidence from Vietnam. Journal of Management Studies, 42(1): 63-93.
69. Meyer, A. D., Tsui, A. S., & Hinings, C. R. 1993. Configurational approaches to organizational analysis. Academy of Management Journal, 36(6): 1175-1195.
70. Meyer, K. E., Mudambi, R., & Narula, R. 2011. Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48(2): 235-252.
71. Ministry of National Development Pla nning. 2010. Regulation of the President of the Republic of Indonesia number 5 of 2010 regarding the national medium-term development plan (RPJMN) 2010-2014, http://www.theredddesk.org/sites/default/files/rpjmn-2010-2014-english-vers ion-20100521111 052-2608-0.pdf, accessed 6 September 2013.
72. Mishra, R. K. 2009. State owned enterprises in India: Reviewing the evidence. Organization for Economic Co-operation and Development, OECD Occasional Paper.
73. Morck, R., & Nakamura, M. 2007. Business groups and the big push: Meiji Japan's mass privatization and subsequent growth. Working Paper Series, No. 13171, The National Bureau of Economic Research, Cambridge, MA.
74. Mowery, D., & Nelson, R. 1999. Sources of industrial leadership: Studies of seven industries. Cambridge: Cambridge University Press.
75. Murrell, P. 2003. Institutions and firms in transition economies. In C. Mé nard, & M. Shirley (Eds), Handbook of new institutional economics 667-694. Dordrecht: Kluwer Academic.
76. Murtha, T.,& Lenway, S. 1994. Country capabilities and the strategic state: How nationa l political-institutions affect multinationalcorporations' strategies. Strategic Management Journal, 15(S2): 113-129.
77. Musacchio, A., & Lazzarini, S. 2014. Reinventing state capitalism: Leviathan in business, Brazil and beyond. Cambridge, MA: Harvard University Press.
78. Narula, R. 2012. Do we need different frameworks to explain infant MNEs from developing countries? Global Strategy Journal, 2(3): 188-204.
79. Newman, K. 2000. Organizational transformation during institutional upheaval. Academy of Management Review, 25(3): 602-619.
80. OECD. 2000. The Indonesian privatization program. Joint OECD/APEC Privatisation Forum, http://www.oecd.org/daf/ca/corporategovernanceofstate-ownedenterprises/1923660.pdf, accessed 18 May 2013.
81. OECD. 2008. State owned enterprises in Russia. OECD Roundtable on Corporate Governance of SOEs, http://www.oecd.org/daf/ca/corporategovernanceprinciples/42576825.pdf. Accessed 18 May 2013.
82. Oliver, C. 1991. Strategic responses to institutional processes. Academy of Management Review, 16(1): 145-179.
83. Ostrom E.(2005) Understanding institutional diversity. Princeton, NJ: Princeton University Press.
84. Pache, A., & Santos, F. 2010. When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3): 455-476.
85. Park, S. H., Li, S., & Tse, D. K. 2006. Market liberalization and firm performance during China's economic transition. Journal of International Business Studies, 37(1): 127-147.
86. Peng, M. W., & Heath, P. S. 1996. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. The Academy of Management Review, 21(2): 492-528.
87. Purfield, C. 2004. The decentralization dilemma in India. IMF Working Paper Series, No. 04/ 32, Asia and Pacific Department of the International Monetary Fund, Washington DC.
88. Ralston, D. A., Terpstra-Tong, J., Terpstra, R. H.,Wang, X., & Egri , C. 2006. Today's state-owned enterprises of China: Are they dying dinosaurs or dynamic dynamos? Strategic Management Journal, 27(9): 825-843.
89. Santos-Vijande, M. L., Sanzo-Perez, M. J., Alvarez-Gonzal ez, L. I., & Vazquez-Casielles, R. 2005. The effects of market orientation on business strategic behaviour. Journal of Strategic Marketing, 13(1): 17-42.
90. Scott, W. R. 2004. Institutional theor y: Contributing to a theoretical research program. In K. G. Smith, & M. A. Hitt (Eds), Great minds in management: The process of theory development: 460-484. Oxford: Oxford University Press.
91. Shapiro, D., & Globe rman, S. 2012. The international activities and impacts of state-owned enterprises. In K. Sauvant, L. Sachs, & W. Jongbloed (Eds), Sovereign investment: Concerns and policy reactions: 98-144. New York: Oxford University Pres s.
92. Slater, S. F., & Narver, J. C. 1995. Market orientation and the learning organization. Journal of Marketing, 59(3): 63-74.
93. Smoke, P. 2001. Fiscal decentralization in developi ng countries: A review of current concepts and practice. Democracy, Governance and Human Rights Programme Paper No. 2, United Nations Research Institute for Social Development.
94. Streeck, W., & Thelen, K. A. 2005. Beyond continuity: Institutional change in advanced political economies. New York: Oxford University Press.
95. Sun, P., Mellahi, K., & Thun, E. 2010. The dynamic value of MNE political embeddedness: The case of t he Chinese automobile industry. Journal of International Business Studies, 41(7): 1161-1182.
96. Tan, J. 2007. Phase transitions and emergence of entrepreneurship: The transformation of Chinese SOEs over time. Journal of Business Venturing, 22(1): 77-96.
97. Thornton, P. H., Jones, C., & Kury, K. 2005. Institutional logics and institutional change: Transformation in accounting, architecture, and publishing. In C. Jones, & P. H. Thorton (Eds), Research in the sociolog y of organizations: 125-170. New York: Elsevier/JAI.
98. Uhlenbruck, K., Meyer, K. E., & Hitt, M. A. 2003. Organizational transformation in transition economies: Resource-based and organizational learning perspe ctives. Journal of Management Studies, 40(2): 257-282.
99. Wang, C., Hong, J., Kafouros, M., & Wright, M. 2012. Exploring the role of government involvement in outward FDI from emerging economies. Journal of International Business Studies, 43(7): 655-676.
100. Wei, Y. H. D. 2007. Regional development in China: Transitional institutions, embedded globalization, and hybrid economies. Eurasian Geography and Economics, 48(1): 16-36.
101. Xu, D., & Shenkar, O. 2002. Institutional distance and the multinational enterprise. Academy of Management Review, 27(4): 608-618.
102. Yamakawa, Y., Peng, M. W., & Deeds, D. L. 2008. What drives new ventures to internationalize from emerging to developed economies? Entrepreneurship Theory and Practice, 32(1): 59-82.
103. Yiu, D. W. 2011. Multination al advantages of Chinese business groups: A theoretical exploration. Management and Organization Review, 7(2): 249-277.
104. Yiu D.W.,Makino S.(2002) The choice between joint venture and wholly owned subsidiary: An institutional perspective. Organization Science 13(6): 667-683.
105. Yusuf, S., & Nabeshima, K. 2008. Two decades of reform: The changing organization dynamics of Chinese industrial firms. In J. Logan (Ed.), Urban China in transition: 27-47. Oxford: Wiley-Blackwell Publishing Ltd.
106. Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38(2): 341-363.
107. Zhang, Y., & Li, X. 2006. Ownership structure and corporate diversification. Business & Politics, 8(1): 1-19.
108. Zhang, J., Zhou, C., & Ebbers, H. 2011. Completion of Chinese overseas acquisitions: Institutional perspectives and evidence. International Business Review, 20(2): 226-238.