Session 27

FDI and Institutions

Track A

Date: Saturday, December 15, 2012


Time: 17:00 – 18:15


Room: Meeting Room 4

Session Chair:

  • Sea-Jin Chang, National University of Singapore

Title: A Process Investigation of Singaporean Investment Outflows to China Versus Domestic Investment Decisions


  • Christine Soh, University of Edinburgh
  • Chris Carr, University of Edinburgh

Abstract: We are the first to embark on the strategic management accounting (SMA) discussion in international business literature, by distinguishing between foreign direct investments (FDIs) versus domestic investments (DIs) modes in the strategic investment decision making process (SIDMP). A through case study approach combining the collection of archival data, field-visits and 36 semi-structured interviews was used. 18 Singaporean companies were matched with 9 Singaporeans companies with Chinese FDIs and a corresponding 9 with Singaporean DIs. The 2 sector analysis in the 4-figure typology, a well-established framework from prior Anglo-Saxon research was increased to 3 sectors comprising the primary, secondary and tertiary sectors in order to increase the understanding of eastern process practises for further research work.

Title: Cooperation and Enterprise Upgrading: A Case Study on Subsequent Growth of a Born International from China


  • Tian Li, Sun Yat-sen University
  • Yangchun Liu, Sun Yat-Sen University

Abstract: This paper provides a case study of a born international company from China. We investigate how the case company achieves its subsequent growth through transforming and upgrading itself continually. Our primary findings illustrate that there are three paths of upgrading for the born internationals: 1) follow the development trend in global market, and replace traditional products; 2) segment and deepen application fields of products, and extend industry chain vertically; and, 3) upgrade across different industries and transform from manufacturing to service. Effective cooperation with five kinds of partners plays an important role during the upgrading. We probe the influencing factors of strategic choices from entrepreneurship, external environment, and internal assets and capabilities. An integrative framework of subsequent growth of born internationals is presented.

Title: Effects of MNEs On Local Firms in Transition Economies: An Institutional Approach to FDI Spillover


  • Kathleen Yi Jia Low, WU-Vienna
  • James Robins, WU-Vienna

Abstract: Studies of FDI spillover have examined effects of foreign investment on economic growth with mixed results. Recent work has begun to go beyond national data to look at underlying mechanisms that affect the success of transfer of technical and managerial knowledge from MNEs to local firms. We use recent insights into institutional theory from work in organizational theory and sociology to examine the underlying mechanisms that help to determine the success of knowledge transfer from MNEs to local firms in transition economies. This offers a more comprehensive view of the microfoundations of FDI spillover and new insights into the reasons why the activities of MNEs succeed or fail in building local capabilities and promoting growth in transition economies

Title: Outward Investments from China and Russia: Institutional Determinants for FDI Exchange


  • Andrei Panibratov, St. Petersburg State University
  • Marina Latukha, St. Petersburg State University

Abstract: Over the past ten years, international scholars have been showing increasing interest in outward FDI from China and Russia, where the key question was: can and should Chinese and Russian OFDI be treated similarly or separately with those from other emerging economies, and, if there is difference, what are the major distinguishing features of OFDI originating from these two countries’ institutional characteristics? The theoretical underpinning of these countries FDI and the practical tools of keeping track over the capital flows are underdeveloped; even less attention of scholars was attributed to the process of FDI exchange between the two countries. It is of particular focus of this paper to examine the drivers and determinants and to investigate the motives for Russian and Chinese FDI exchange.

Title: The Exporting Trading Companies from China: Institutions and Transaction Costs


  • Jia Li, University of Edinburgh
  • Ling Liu, University of Edinburgh

Abstract: Trading companies are traditionally stated as the facilitator of international trade by offering transaction-reducing services and functions. In transitional economies, like China, they are confronted with more unique institutional environment and institution-related transaction costs. Using eight exporting trading companies (ETCs) from China as cases, we illustrate how ETCs deal with exporting transaction to reduce these institution-related transaction costs, and identify the relative institutional barriers and voids, which are two main characteristics during the institutional transition of China.

Title: When East Meets West: The Performance Impacts of Foreign-Market Knowledge and Institutional Origins on Domestic IPO Firms in China


  • Pao-Lien Chen, National Tsing Hua University
  • Ruey-Jer Bryan Jean, National Chengchi University
  • Danchi Tan, National Chengchi University

Abstract: This paper examines the drivers of indigenous firms’ performance in a transitional economy after the indigenous firms are governed in accordance with the rules of a market economy, post-IPO. We propose that the post-IPO performance of an indigenous firm would depend on the institutional origin of the firm, the foreign market knowledge the firm obtains, and the transformational experience of the firm. Therefore,in a transitional economy from central planning to market coordination, privatized-state corporations will perform worse than entrepreneurial ventures; knowledge transfer from developed countries enhances firm performance but this effect declines over time; and the privatized-state corporations will have a higher positive performance impact from knowledge transfer from developed countries than entrepreneurial ventures. We empirically examine our research questions on a sample of entrepreneurial firms that are incubated in Zhongguanchu Science Park and later went on IPO domestically.

All Sessions in Track A...

Sat: 09:00 – 09:30
Session 35: Conference Welcome
Sat: 09:30 – 10:45
Session 30: Keynote Plenary Panel: Competing and Cooperating in and for China
Sat: 11:15 – 12:30
Session 4: Competition and Adaptation
Session 11: Firm Boundaries and Growth
Session 19: Global Strategy
Session 26: Entrepreneurship in China
Sat: 13:45 – 15:00
Session 31: Plenary Panel II: Collaborative Strategies in and for China
Sat: 15:30 – 16:45
Session 6: CSR and Sustainable Development
Session 7: Entrepreneurship
Session 9: Executives and Incentives
Session 22: Panel: Innovation
Session 24: Managing Innovation Strategies
Sat: 17:00 – 18:15
Session 5: Corporate Governance
Session 8: Evolution and Ecosystems
Session 10: FDI
Session 12: Innovation Strategy
Session 27: FDI and Institutions
Sun: 09:00 – 10:15
Session 32: Plenary Panel III: Corporate Governance and Executive Leadership in the Age of Globalization
Sun: 10:45 – 12:00
Session 13: Institutions
Session 15: Internationalization II
Session 16: Networks
Session 29: Resources and Capabilities
Sun: 13:45 – 15:00
Session 33: Plenary Panel IV: Strategic Management Research in China - What is Next?
Sun: 15:30 – 16:45
Session 3: Alliances and Cooperation
Session 14: Internationalization I
Session 17: Social Capital
Session 28: Governance, Knowledge, and Cooperation
Sun: 17:00 – 18:00
Session 34: Executives Plenary Panel: Innovation Strategy in China

Strategic Management Society