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Outward internationalization of private enterprises in China: The effect of competitive advantages and disadvantages compared to home market rivals

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Intellectual Contribution by Lihua Wang

Contribution Title

Outward internationalization of private enterprises in China: The effect of competitive advantages and disadvantages compared to home market rivals

Publication

Journal of World Business

Co-author

Xiaoya Liang and Xiongwen Lu

Year

2012

Description

This study uses the resource-based view of a firm to examine the outward internationalization of private firms in China. We investigate the extent to which advantages/disadvantages of resource endowment and organizing capability of Chinese private enterprises (relative to both state-owned enterprises and foreign-invested enterprises) may drive outward internationalization and affect their risk taking tendency when going international. Our analyses of 553 Chinese private enterprises show that a Chinese private firm's likelihood of venturing aboard is associated with resource endowment advantages vis-_-vis foreign-invested enterprises, organizing capability advantages vis-_-vis state-owned enterprises, and organizing capability disadvantages vis-_-vis foreign-invested enterprises. These same advantages (or disadvantages) in organizing capabilities also increase a firm's likelihood of choosing a high-risk entry mode. We also find that a firm's resource endowment and organizing capabilities interact with each other and mutually enhance each other's effect on the likelihood of outward internationalization.

Complete Citation

Liang, X., Lu, X., & Wang, L. (2012). Outward internationalization of private enterprises in China: The effect of competitive advantages and disadvantages compared to home market rivals. Journal of World Business, 47(1),134-144.

Website

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