An investigating on the influence of state capitalistic policies on the internationalization path of the firm

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The rise of the emerging markets:

An investigating on the influence of state capitalistic policies on

the internationalization path of the firm

Source: Jean Sanuk, International viewpoint, 2011

Rijksuniversiteit Groningen Oude Kijk in 't Jatstraat 26 9700AS GRONINGEN University of Newcastle 5 Barrack Road,

NE1 4SE, Newcastle upon Tyne January 01, 2014

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Abstract

Previous research has determined that emerging market firms internationalize differently to western firms, although it has not been determined why. This study basis the difference on heterogeneous institutional environments and therefore investigates how discriminatory policies of state capitalistic China influence the internationalization path of domestic firms, through a comparative analysis between four firms from the Chinese high tech industry (Haier, ZTE, Huawei and Lenovo). The comparative analysis incorporates multiple theoretical perspectives (country-, industry- and firm-level) to illustrate how internal and external pressures are inter-related, which enables the research to clarify why western theories are not capable of analyzing the internationalization path of emerging market firms. This is demonstrated with Dunning’s (1995) Eclectic model.

This study finds that discriminatory state capitalistic policies cause domestic firms to internationalize differently from each other and that the difference lies between the privileged (Haier, ZTE and Huawei) and non-privileged firms (Lenovo). Researchers, managers and politicians need to be aware of this segregation, as state capitalistic policies cause this unnatural phenomenon.

The study furthermore finds that observing through multiple perspectives is necessary to create a deeper understanding, as country-, industry- and firm-level factors together influence the

internationalization path of SC firms.

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Fig. 2: The internationalization process of western firms 20 Fig. 3: The conceptual model: The internationalization process of state capitalistic firms 21 Fig. 4: China’s annual OFDI flow 1982-2009 26 Fig. 5 The modified internationalization model for SC firms 56 Table 1: The internationalization path of the firms intertwined with the institutional and industrial transformations 43 Table 2: Comparative analysis of four state capitalistic firms in the high tech industry of China 52

Table 3: Dunning’s Eclectic model for SC firms 57

Abbreviations

EMNC: emerging market multinational corporation EU: Europe - west and middle

FDI: foreign direct investment

HQ: headquarters

IT: Institutional Theory MNC: multinational corporation

OFDI: outward foreign direct investment POE: privately owned firm

R&D: research and development RBV: Resource Based View

RV: Relational View

SC: state capitalism SOE: state owned enterprise

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Acknowledgements

My thanks go out to several people, who have been a great help and inspiration throughout the research, as their commitment and dedication has been of invaluable help to me.

I would like to especially thank my mentor Rudi de Vries for his guidance and expertise, which has enabled me to discover important insights into the process of research and helped me improve my reasoning skills. I would also like to give thanks to my mentors Mitchell Ness and Natalia

Yannopoulou, as they supplied me with helpful criticism. The combined effort of my mentors has made this research process informative and at times even enjoyable.

A very special thanks also goes out to my mother Carla Wentink, who has continuously supported me. Not just during the report, but since the start of primary school. I therefore dedicate this report in her honour, as she has never stopped believing in me.

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1. Introduction

The presence of emerging market firms in the global market has increased significantly in the last 30 years, which has caused western multinationals to experience an increase in competition and to lose marketshare in home and foreign markets (Luo & Tung, 2007). Additionally research shows that emerging market firms internationalize differently to western firms, with respect to host country selection and entry mode methods. It is therefore important to accurately determine how emerging market firms internationalize, but western internationalization theories are incapable of doing this, as they approach the phenomenon from a singular perspective, while multiple perspectives are necessary (Wright, Filatotchev & Hoskisson, 2005).

This research adds to the understanding of why and how emerging market firms internationalize differently to western firms, by investigating the influence of state capitalistic policies (SC) on the internationalization path of domestic firms. It then uses these findings to modify a western

internationalization theory (Dunning’s Eclectic model, 1995), to make it suitable for state capitalistic firms and exemplify why western firms are incapable of assessing the internationalization path of SC firms.

In SC countries the government treats the firms unequally, which is in contrast to western

governments, where this is not allowed. The unequal treatment of SC firms is bound to influence their internationalization path, as the government directly influences the external and internal environment. To account for the internal and external pressures the research approaches the phenomenon from multiple perspectives (country-, industry- and firm-level), as these are inter-related. The research investigates the difference in internationalization on the basis of governmental ownership. The findings are extracted by comparing the internationalization paths of four large and successful firms from the Chinese high-tech industry. Two of these firms are partially government-owned (Haier and ZTE) and two of them are privately owned (Huawei and Lenovo).

The research finds that discriminatory state capitalistic policies cause firms to internationalize

differently. Furthermore it also determines that firms do not internationalize differently on the basis of ownership mode, but on the basis of whether or not they receive state privileges. Additionally the research finds that multiple perspectives are necessary to create a deeper insight, because country-, industry- and firm-level factors are inter-related and influence the internationalization path of the firm.

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performed. The empirical research starts with an analysis of the institutional environment, the industrial environment and of the internationalization paths of the four firms. These

internationalization paths are then compared with each other, through which the institutional

influences are extracted. The analyses and the comparisons are then applied to review the propositions. In the final chapter the main question is answered and the theoretical contributions discussed. The research is concluded by stating practical implications, limitations and avenues for future research.

2. Background

The background describes the outlining of this research. It starts with an introduction into the topic, it then demonstrates why conventional research methods are not capable of researching the problem and concludes with the main research question and the research objectives.

2.1 Introduction into the topic

Over the last 30 years outward foreign direct investment (OFDI) from Asian emerging markets has become more and more important, due to the consistent increase in size (fig 1.). OFDI is defined as investment from the home country into the host country (Kofele-Kale, 1992). Through domestic and international changes emerging market multinational corporations (EMNCs) have become

increasingly involved in international business. EMNCs are firms that are active in multiple nations, owned by shareholders and originate from emerging markets (Kothari, 2013; Kogut & Zander, 1993). Emerging markets are defined as countries that have underdeveloped formal institutions (law and law enforcement) and a growth percentage in GDP of 4% or more (Deng, 2012). Several EMNCs have increased to such an extent, that they are now strong competitors of western multinationals. Some of them have become market leaders in their industry, like Lenovo, Tata, JBS and Petronas (Kothari, 2013; Deng, 2012). Western markets are defined as countries that are part of the OECD agreement and entail: North America, West & Central Europe, Australia, New Zeeland, Japan and Korea (OECD, 2013).

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Fig. 1: Rise in OFDI from developing Asian economies 1980-2013 (US$ millions),

This figure indicates the rise of OFDI from Asian markets over the last 30 years Source: UNCTAD, WIR 2013

Researchers interested in the rise and internationalization path of the EMNCs, have observed that multinationals from emerging markets internationalize differently to western multinationals, as they have different incentives (Gammeltoft, Filatotech & Hobdari; 2012). The internationalization path describes the international activities, which the firm experienced throughout its lifetime. It relates to both market seeking activities, as well as searching for advanced international knowledge and technology (Deng, 2009; Luo & Tung, 2007). This research is built on the assumption that this is due to heterogeneous institutional backgrounds, as different systems (state capitalism, liberal capitalism and social capitalism) cause firms to internationalize for different reasons (Deng, 2009; North, 1990). To investigate this assumption, the influence of governmental policies on the internationalization process of the firm is researched. The internationalization process in this context consists of (1) the reason for internationalizing, (2) the country selection process and (3) the entry mode used to enter the market. The entry mode entails the choice between agent, joint venture, merger, acquisition and greenfield plant (Woodcock, Beamish & Makino, 1994).

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the basis of this analysis as the government clearly treats domestic firms differently. This makes an observable research possible, unlike in many other emerging countries like India, where connections between companies and state officials are less clearly defined (Kothari, 2013).

In China there are fourteen different types of firms, which indicate the different level of government control within a firm (Amighini, 2013). In this research Chinese firms are clustered into three types (1) State Owned Enterprises (SOEs), these are under total state control, (2) Hybrids, these are stock market listed firms, in which the state has a medium to high control stake (50%<) and (3) privately owned enterprises (POEs), these are run by a managements that operate independently from direct governmental influences (Ahrens & Zhou, 2013; Wei, 2011, Zhang, Zhou & Ebbers, 2011). POEs are considered to be owned by private investors, however “guoyou minying” also fall within this category. This is the Chinese name for firms that are setup with a singular and limited start-up loan from

governmental institutions, but otherwise operate fully independent from the government. This enables the founders or management to make their own strategic choices, hire self-selected personnel and set its own wages and bonuses. ‘In English, they are referred to as nongovernmental companies’ (Ahrens & Zhou, 2013:3). The state treats these types of firms as POEs and does not cover their losses, as is expected with SOEs (Ahrens & Zhou, 2013).

From these three ownership modes Hybrids and POEs act in accordance with profit seeking motives, while SOEs strive towards political targets that consist of obtaining strategic resources and technology (Amighini, 2013). This makes the incentives to internationalize very different between POEs and Hybrids on the one hand and SOEs on the other hand. Therefore this research only compares the internationalization paths between Hybrids and POEs and leaves out SOEs, as their objectives in internationalization are considered too different for this research and because all western firms act in accordance with profit seeking motives.

The research entails a comparative study, in which the internationalization paths of four Chinese firms are analyzed and evaluated. The firms under observation are two Hybrid firms (ZTE and Haier) and two POEs (Lenovo and HUAWEI). All selected firms operate in the high-tech industry. This enables a more valid comparison to made, then when firms from various industries are selected. The difference in the internationalization process between Hybrids and POEs should provide insight into how SC governments affect the internationalization path of the firm. By analyzing the path of the firms, answers to the following questions should be obtained: what are the incentives behind the

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From the literature review propositions are extracted that portray the different internationalization strategies between POEs and Hybrids. These will be evaluated in the actual research. The practicalities of the results will be that researchers can obtain credible insights, by segregating SC firms into

different entities based on their governmental ties. Managers will be more aware of how firms from SC nations act in international business and politicians are better informed about the motives and incentives of firms from SC nations in internationalization. Additionally this study aims to use the findings, to make complementary adjustments to Dunning’s (1995) Eclectic model, so that the model may also be applied to SC firms.

2.2 Research approach – Moving away from the conventional approach

Almost all of the researchers that compare the internationalization path between firms from emerging markets and western markets treat those firms that originate from emerging markets, as if they are western firms (Wright et al., 2005). What this means, is that firms from emerging markets are assumed to be treated equally by their domestic government and are portrayed to have the same objectives in internationalization as western firms. This study disputes this conventional approach, as governments from emerging markets play a more dominant role in the internationalization process of their firms, as compared to western governments. In the case of SC nations, the government deprives POEs from country resources and benefits Hybrids with these, as the government uses them to attain the political goal of profit generation (Amigani, 2013). The resources are defined by financial resources, like access to capital and foreign exchange and non-financial resources, like raw materials, human

resources and technology (Gammeltoft et al., 2012). By recognizing and acting upon this observation, this research aims to exemplify why it is important to segregate these firms and obtain insight into how governmental policies influence the internationalization path of the firm.

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that to study the internationalization path of SC firms a multi-level approach must be taken to obtain a credible insight (Gammeltoft et al., 2012; Slangen & Hennart, 2007).

2.3 Problem statement

The main research objective is to add to the understanding of why SC firms internationalize differently to western firm, by investigating the effect of governmental policies from SC China on the

internationalization path on domestic firms. Therefore the main question states: How do discriminatory state capitalistic policies influence the internationalization path of Hybrid

enterprises and Privately owned enterprises? The main question will be answered by performing a

comparative research in which the internationalization paths of four firms are analyzed. The aim of the analysis is to link the answers of why, where and how they internationalized to the discriminatory policies of SC. By performing this analysis the aim is to realize the following four sub-objectives:

1) Provide evidence that SC capitalistic firms internationalize differently from each other 2) Compare the causality in their internationalization difference

3) Determine how this causality influences the internationalization path

4) Modify the findings to Dunning’s (1995) Eclectic model, to make it suitable for state capitalistic firms

2.4 Summary

The background review indicates that SC firms internationalize differently to western firms and relates to their heterogeneous institutional environments. Furthermore it shows that SC firms also

internationalize differently from each other, as discriminatory SC policies privilege Hybrids with financial and non-financial benefits, in contrast to POEs who are faced with resource shortages and governmental restrictions. This research therefore aims to investigate how these discriminatory SC policies influence the internationalization path of these firms, through a comparative analysis that incorporates a multi-level investigation, in which country-, industry- and firm-level factors are brought together.

3. Literature review

In this chapter western theories and theoretical findings are reviewed. These are used to develop a theoretical framework, create insight into the matter and to generate the propositions, which will be evaluated in the research.

3.1 Theoretical framework

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2012; Nonis & Relyea, 2012; Demirbag, Glaister & Tatoglu, 2007) and because these theories separately are not able to exemplify how SC firms internationalize (Deng, 2009). The second part contains Dunning’s (1995) Eclectic model, which is reviewed and later discussed, as to why it is also not applicable to SC firms. The final section reviews how SC has influenced China’s governmental policies and how it uses international business to obtain political objectives. This provides the background on which the propositions are stated in the next part of this chapter.

3.1.1 Western internationalization theories

To generate a framework in which the country’s perspective is related to the firm level perspective, three theories have been selected. Representing the country level perspective is the institutional theory (Dimaggio & Powel, 1991; Rugman, 1981), while the firm level perspective is represented by the resource based view (Barney, 1991) and the relational view (Dyer and Singh, 1998). The three theories are first reviewed and then combined, to give insight into how the actions of SC firms can be assessed in international business.

3.1.1.1 Institutional theory from a state capitalistic perspective

The framework of a country’s perspective is built up of formal and informal institutions. Formal institutions relate to laws, norms and organizations; these represent the rules to which a firm has to comply. The informal institutions involve social norms and values; they refer to the manner people interact in (Amin, 1999).

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3.1.1.2 Resource based view and the Relational view

The Resource based view (RBV) emphasizes that firms internationalize to obtain and exploit strategic resources and capabilities that are housed within the firm (Barney, 1991). Proponents of the RBV argue that competitiveness arises from valuable resources and capabilities that are costly to imitate (Barney, 1991; Derrick and Cool, 1989).

Contrary to the RBV the relational view (RV) argues that such competitiveness arises not from intra-firm, but from inter-firm activities (Dyer and Singh, 1998; Gomes Casseres, 1994).

The two theories were perceived to be each other’s opposites, but further research has proven that they extend one-another’s view (Lavie, 2006). Alliance partners can play a significant role in shaping the resource-based competitive advantage of the firm (Afuah, 2000; Lee and Pennings 2001) by supplying the other firm with network resources that are not available to other competitors (Gulati, 1999). A firm can therefore extract value from resources that are not fully owned or controlled by the organization (Lavie, 2006).The connection between firms can be termed as a sustainable competitive advantage as long as partners do not venture with competitors. In this research inter-firm relationships are

formulated as being part of a business group.

3.1.1.3 The country level perspectives combined with the firm level perspectives

The influence of SC on internationalization process can be exemplified by relating the theory of IT, as country level perspective with RBV and RV, as firm level perspectives. A multilayered theoretical perspective provides a deeper level of insight, about how external pressures influence the

internationalization strategy of the firm.

The internationalization strategy of the combined theories consists of three variables: the

internationalization objective (resource exploitation or exploration), the available resources and the institutional environment of the host country. Firms that are in possession of more resources are capable of choosing from a larger array of entry mode strategies, as entry modes vary in costs. The RV adds to the framework by including the initiative of joining business groups, as these can help bridge institutional voids.

3.1.2 Internationalization path of the firm – Dunning’s Eclectic model

In this part the literature review elaborates on Dunning’s (1995) Eclectic model, because this model is supposed to clarify every step along the firm’s internationalization path, with respect to market and resource seeking activities. However this model only reasons from firm level perspectives, whereas a country level perspective is also necessary to assess firms that originate from SC nations.

3.1.2.1 Dunning’s Eclectic model: a firm-level perspective

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on the recognition of two forms of market imperfections. The first is caused by structural market failure due to distorted market conditions and the second is caused by natural market failure due to not being able to optimize the supply and demand. It also takes into account the distortions related to information asymmetry, bounded rationality and opportunism. Based on these issues the Eclectic model argues that there are three related reasonings as to why firms commit to being locally present. These are ownership, location and internalization advantages (OLI), which are connected to obtaining strategic resources, capabilities and network connections.

3.1.2.2 The Eclectic model: absence of country level perspective

Dunning’s Eclectic model is incomplete, as it supports the reasoning from a firm level perspective alone and relates the internationalization path of the firm to profit seeking motives only. The Eclectic model does not comply with motives from SC firms, as these often internationalize to obtain

institutional objectives (Wei, 2011). Another issue relates to institutional advantages of the host country, as POEs from China are often in search of institutional support instead of market

opportunities, because China’s financial and non-financial resources are reserved for firms that are connected to the state (Gammeltoft et al., 2012). Therefore the institutional aspects as well as the industrial and market aspects need to be taken into account. The model also does not account for host country regulations that ban certain types of OFDI (Slangen & Hennart, 2007).

These issues make the model incapable of reasoning why SC firms make certain internationalization decisions; therefore additions need to be made to the model so that it can be applied to SC firms.

3.1.3 State capitalism and the institutional environment

In this section an in-depth review is given on the most relevant findings with respect to China’s SC system and how it influences the institutional environment. It starts by elaborating on how China functions as a SC nation. This is followed by reviewing how SC uses OFDI to achieve political goals.

3.1.3.1 The state capitalistic vision in China

SC nations have a different outlook on the ideal economic framework, in contrast to western nations. Callahan (2011) describes this vision as: China is run as one giant corporation. He substantiates his statement by arguing that: (1) China’s aim is to generate profit as a whole, (2) its employees (citizens) have no rights (dictatorship) and (3) its survival is more important than that of the individual. In this vision of SC, China directly controls the domestic markets and moves country resources towards SOEs and Hybrids that embody the goals of the government. These goals entail moving up the global value chain (Gordon, 2012), so China can move away from the least productive stage of

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has significantly increased the nation’s position in the global economy, as regulations on OFDI were cut-back and the state started guiding its domestic firms in internationalization (Luo et al., 2010; Buckley, Clegg, Cross, Liu, Voss & Zheng; 2007). From a country level perspective, China seeks strategic resources through OFDI to reinforce its goal to move up the global value chain (Walter, 2010). To obtain these strategic resources it uses SOEs and Hybrids to commence in large OFDI missions, as the state can control and influence the objectives within these firms (Wong & Chan, 2003; Ralston, Terpstra-Tong, Terpstra, Wang & Egri, 2006).

3.1.3.2 The direction of OFDI from China

Kollstad & Wiig (2012) state that China internationalizes into lower developed institutional

environments to attain natural resources and into OECD countries to attain tacit resources and market share. Tacit resources in this context are defined as technological know-how that can form a strategic enhancement and industry related knowledge that can induce the operational efficiency in the host country (Slangen & Hennart, 2007). According to Luo and Tung (2007:484) China uses its ‘SOEs and Hybrids to operate along a focussed line of business and products to play dual roles, on the one hand to reap the fruits of international expansion as a legitimate business and on the other hand to

complement state-assigned mandates within their area of expertise’. Deng (2012) complements this finding by stating that Chinese firms gain more than western firms due to a dual expansion path. The first path relates to complementing internal resources by integrating attained foreign assets with domestic assets. The second path relates to obtaining local knowledge through industrial spill-over effects by working together with local universities (Chen, Li & Shapiro, 2012) and by entering local knowledge networks (Porter, 1990).

3.2 Proposition development

Based on the findings of the literature review, six propositions are stated and are assessed during the research. The focal point around which the propositions are formulated are the discriminatory SC policies that influence the internationalization path of Hybrids and POEs.

3.2.1 Segregation through industry importance for SC China

In SC China the market is regulated by the government. Different levels of control are instated

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3.2.2 The effect of discriminatory policies on the characteristics of the firm

The various ownership modes in SC China relate to differing levels of government control. This provides exclusive characteristics, as each mode situates the firm in a different environment due to discriminatory policies (Amighini, 2013). It affects the internationalization strategy of the firm, as each mode has different resources and capabilities. These influence the goals in internationalization (Ramasamy et al., 2012). Gammeltoft et al., (2012:177) complements this finding by stating that ‘a particularly important contingency in most developing and emerging economies is the extent to which a firm occupies a privileged position vis-á-vis the state and this includes the preferential finance position, foreign exchange assistance, technical support, privileges in domestic markets and state ownership’ (Cai and Tylecote, 2008). POEs often miss out on institutional resources as most of these are absorbed by the SOEs and Hybrids. This causes major resource shortages amongst POEs

(Sutherland & Ning, 2011). Hybrids will therefore be able to internationalize sooner into foreign markets POEs, since they need less time to gather resources before they can internationalize.

Proposition 1: Hybrids will internationalize sooner into foreign markets than POEs

The privileged position will enable Hybrids to apply more entry mode methods than POEs, as they have more resources to apply high cost entry modes. Acquisitions and setting up wholly owned subsidiaries fall under this definition and are more effective in obtaining foreign knowledge and entering a new market, in comparison to the low cost entry method of agents and joint ventures (Slangen & Hennart, 2007). Therefore Hybrids will have the possibility to choose between different entry modes, while POEs are forced to use the less resource demanding entry mode of joint venture, due to their resource deprived situation.

Proposition 2: Hybrids will enter markets through low and high cost entry modes, while POEs will internationalize only through low cost entry modes

From the shareholder point of view, firms in which the state has total or a majority control are less profit driven than POEs (Ramasamy et al., 2012), as they pursue political as well as economic

objectives (Song, Storesletten & Zilibotti, 2011). Combined with the governmental strive to leadership in the global market, the connection can be made that Hybrids will internationalize to become globally competitive, while POEs seek to optimize profits.

Proposition 3: Hybrids will internationalize into more countries than POEs in the same time span

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business groups and set out their own objectives. Firms in business groups assist each other to bridge institutional voids, like resource shortages and international inexperience (Gulati, 1999). Business groups can also increase the firm’s innovation capabilities, by bringing innovators together through enlarged networks (Choi et al., 2011).

All factors mentioned above create the opportunity for POEs within business groups to internationalize sooner, than POEs that do not operate in a business group (Guillén, 2000).

Proposition 4: POEs that are part of a business group will internationalize faster into foreign markets than POEs that operate singularly

3.2.3 The influence of the host country on the internationalization path of Hybrids and POEs According to institutional theory (IT) the institutional environment of the host country influences the firm’s country selection process and entry mode strategy (Slangen & Hennart, 2007; Zhang & Daly, 2011). Chinese OFDI can be met with both rejection and appraisal.

The host-country’s fear originates from several perspectives: (1) the loss of control over strategic industries, (2) corruption of the liberal system and (3) concern for asset stripping and potential job loss (Rosen & Hanenmann, 2009). Countries therefore may resent OFDI from China.

Opposite to the resentments, OFDI can also create enrichment as Lipsey (2004) summarizes: (1) the wages offered by foreign companies are usually higher than wages from domestic companies, (2) they increase the capabilities of a nation, as international firms are often more efficient in their operations, (3) they can supply knowledge spill-over to local companies and (4) inward investments allow countries to move away from commodity trade, to exporting manufactured goods. Zhang & Daly (2011) add to this summation that OFDI from China is promoted by open economic governments and resource rich countries.

In OECD countries the disadvantages generally outweigh the benefits for OFDI from China, while for underdeveloped economies it is the opposite (Kollstad & Wiig, 2012). The restrictions of OECD countries towards hybrids are higher than for POEs due to their governmental ties and

internationalization goals. The effect will therefore be that Hybrids may not be allowed to enter certain markets or apply certain entry modes.

Proposition 5: Hybrids will experience more restrictions in OECD countries than POEs

3.3 Summary

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on SC China are reviewed and used to substantiate the propositions. In the next section the multi-level perspective is used, to illustrate why western theories cannot exemplify how SC firms internationalize.

4. Conceptual model

In this chapter the conceptual model is generated and is based on the western internationalization model, which describes the internationalization process based on the RBV and incorporates

environmental pressures and opportunities. It is however not applicable to SC firms, as it does not take into account the direct influence of governmental policies on the firms resources and capabilities. Therefore additions need to be made. The first part addresses the western internationalization model, which explains the internationalization path of firms from a western perspective. The second part elaborates on the extensions that make the model suitable for firms from SC China.

4.1 The western internationalization model

The western internationalization model exemplifies the internationalization process of country selection and entry mode strategy. It does this by taking into account: the firm’s resources and capabilities, the industry conditions of the home market and the home and host country’s institutional environment (fig. 2).

The model consists of three independent variables and two dependent variables. The first independent variable is the home country’s institutional environment. It consists of the formal and informal institutions (Amin, 1999) and sets out the economic framework of the industry (North, 1990). The second independent variable is the firm’s resources and capabilities.

The resources consist out of the financial and non-financial investments made by the owner(s) (Wright et al., 2005) and the capabilities consist of products and skills that are valuable, rare and difficult to imitate or substitute by competitors (Barney, 1991). The third independent variable is the host country’s institutional environment, as it can influence the country selection process as well as the entry mode strategy (Dimaggio & Powell, 1991). Together these three independent variables provide the input that determines the internationalization process.

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Fig. 2: The internationalization process of western firms

This figure illustrates the external and internal forces that affect the host country selection and entry mode method of western firms

4.2 The conceptual model for State Capitalistic firms

The western internationalization model is not suitable for SC firms, as it does not account for the the governmental influence on the firm’s resources and capabilities. To make the model suitable for SC firms modifications have to be made to it (fig. 3).

4.2.1 Why alterations are necessary

In China the government regulates the market in contrast to western markets. This creates an

imbalanced distribution of country resources, as firms under state control are privileged with these in contrast to POEs. POEs can therefore also extract less resource from the home market, as the

government decides who receives financial and non-financial aid. This makes the imbalance even larger. POEs can however join business groups to help bridge institutional voids, by providing members with resources and network connections. In this model the SC firms are represented by Hybrids and POEs.

4.2.2 Presentation of the conceptual model

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Fig. 3: The Conceptual model: The internationalization process of State Capitalistic firms

This figure illustrates the external and internal forces that affect the host country selection and entry mode method of SC firms. Additionally it illustrates how the government directly influences the resources and capabilities of the firm.

4.3 Summary

This chapter demonstrates how the western internationalization model is not capable of assessing SC firms. It does this by adding the perspectives of RBV, RV and IT into the model, which make it capable of assessing the internationalization path of SC firms.

5. Methodology – A comparative case study approach

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understanding of the issue’ (Steinke, 2004, P.187). When trying to build theory instead of substantiating it, a researcher is more inclined to apply qualitative research techniques (Thomas, 2004), because dealing with an issue in which a lot of complex interactions are involved, requests research techniques that are capable of elaborating on multiple different factors. An extra argument in favour of qualitative techniques arises from working with emerging markets where exact data is scares, due to inconsistent accounting and data gathering techniques (Kothari et al., 2013).

5.1 Research approach

A comparative study has been selected to analyse the influence of SC policies. It compares the

internationalization paths of four firms from the Chinese high tech industry. Results extracted from the comparisons will demonstrate the influence of SC policies and why SC firms internationalize

differently to western firms. It will also demonstrate why western theories are incapable of assessing the internationalization process of SC firms. The reason to choose four firms is to create the optimum between breadth and depth, which lies between four and ten cases (Eisenhardt, 1989). Data will be gathered from already existing case studies, as ‘case studies are employed to gain an in-depth

understanding of the situation and meaning for those involved, as the interest is in process rather than outcomes, in context rather than a specific variable, in discovery rather than confirmation’ (Merriam, 1998: p. 19). Case studies that have investigated the internationalization path of the firms will be complemented by a situational data review to create a broader understanding of why and how the companies acted.

5.2 The sample units

To assess the research question four firms from the high-tech industry have been selected for the following reasons: first, the high-tech industry is one of the eight favored high-end markets within China (Rabinovitch, 2011); this means that the government is heavily involved and exerts significant amounts of influence in this sector. Secondly, due to the size of the industry both ownership forms are present, therefore making a comparative analysis possible. Thirdly, due to the size and the longevity of the high-tech industry, there is significant supply and access to data surrounding the multinationals, to create a holistic comparative study. Finally, by selecting firms from the same industry, future research can complement this research by adding findings from another Chinese industry, so the level of significance for a generalized theory can be increased.

5.2.1 The individual firms

The two firms that represent the Hybrids are Haier and ZTE and those that represent the POEs are Huawei and Lenovo, as these firms have all become large and successful international players over the past 20-30 years.

The firms in summation:

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and color TVs’ (Child & Rodriguez, 2005). It came from a merger between the state-owned company Qingdao and the Lieber group. Today Haier is one of the world’s largest white goods producers and also has exports worldwide (A Brief History of Haier Group, 2013)

The ZTE Corporation was founded in 1985, by the formation of a jointly owned electronics firm. ‘The company offers a variety of telecom hardware, including base stations, phones, and systems for switching, optical transport, videoconferencing, power supply, and monitoring. The company is a leading holder of intellectual property (patents) and one of the largest telecommunications equipment exporters in China. ZTE sells to more than 500 telecom carriers worldwide, with customers

that include AT&T, Sprint, Verizon, TELUS, China Mobile, and China Telecom.’ (Marketline, 2013)

Huawei was founded in 1988, by Ren Zhengfei who is also the current president. Huawei focuses on network equipment, mobile broadband devices, handsets and convergence devices. Additionally, Huawei has also chosen to focus on offering customer services, with respect to ICT issues. Currently Huawei holds offices in a 140 countries and is the 2nd largest telecommunications equipment producer in the world and aims to become the largest (Ahrens, 2013).

Lenovo was founded in 1984, in Beijing by (current chairman) Liu Chuanzhi and ten other colleagues. The company began as an agency company, distributing Hewlett Packard computers, while also working on their own computer, which it started selling in 1994. In 1998 Lenovo became the biggest computer producer in China and its current aspirations are to face the competition of Dell, Apple and Hewlett-Packard head on. It focuses on innovating through acquisitions and Joint ventures and being locally competitive, by adapting its product selection to the environment in which it operates (Ahrens & Zhou, 2013). Lenovo is also part of a business group, which is called the Lenovo business group.

5.3 Data sources

The collection of data consists out of examining existing case studies on the four firms and analyzing multiple data sources that supply extra insights and knowledge about surrounding factors. In this research the decision has been made not to apply primary data, for several reasons: inaccurate feedback, time restraints, high costs, respondents are not willing to reveal the data and low level of efficiency (McMillen & Schumacher, 2006). The in-depth reasons are laid out in the appendix.

5.3.1 Data sources and Collection method

The high-tech industry has been selected, because it is one of China’s most elaborated industries, therefore a lot of case studies are available from journals as well as from private investigators. This also counts for situational data that surrounds the firms operations. Situational data sources can be separated into two groups: the published and printed sources and the unpublished records. The

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supply additional access to university data bases, scientific journals and industry investigators (Mintel and Passport). Situational data can also be obtained by using Google news archive and LexisNexis (Kothari, 2013).

5.3.2 The limitations and evaluation

Secondary data has the benefit that it covers a wide area and is relatively easy and cheap to obtain, but also has severe disadvantages. As secondary data may be general, vague, old, outdated, and inaccurate and the company publishing the data may not be reputable (Scott, 1990). Due to these issues

secondary data must be accurately researched with respect to validity and significance. This means assessing the data on the following points (Brackstone, 1999; Scott, 1990): 1) Relevance, the data must be checked to the point that the findings of previous studies are compatible to the current study. 2) Accuracy, determines to what level of significance the data describes the phenomenon. 3)

Authenticity, is necessary to determine and evaluate the specification and methodology used to obtain the secondary data and 4) Sufficiency and coherence, which relates to the fact whether the quantity of data is capable of creating a significant answer and if found information is capable of melting together into a coherent and clarifying total.

5.3.3 Data analyses

In order to determine the relation between the firm, the government and the internationalization path of the firms, the conceptual model is going to be used as a guide to find: why, where and how firms internationalized on a longitudinal scale. The first question “why”, relates to the strategic goals, termed by the firm’s owners (government and/or shareholders) and includes resource seeking or resource exploitation or both (Hitt, Ireland, Camp & Sexton, 2000; Witt & Lewin, 2007). The second question “where”, refers to the country selection process of the particular country (Beule et al., 2013). The final question “how” determines the reasons behind the entry mode (Lou et al., 2010; Khanna & Palepu, 2010; Luo & Tung, 2007). In relating the answers to one another, it is interesting to offset them against the question “when”. When, relates to the contemporary phase of the institutional environment of SC China, as China’s transitional government has gone through multiple phases. Therefore the study aims to obtain a deeper understanding of the influence of governmental policies on the firm’s internationalization path (Wu & Zhao, 2007; Walter; 2010; Cheong, 2011; Gammeltoft et al., 2012). The research is concluded with a comparison between the POEs and the Hybrids, to enable an evaluation of the five propositions. These results from the evaluation will allow the research question to be answered and complementary modifications to be made to Dunning’s (1995) Eclectic model.

5.3.4 Ethical standards

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ethical issues will occur, as the secondary data sources on the performed strategy are openly available. The research units involved are therefore aware that this information can be used in comparative analyses.

5.4 Summary

This research aims to determine that Hybrids internationalize differently from POEs. This indicates that firms that originate from China internationalize differently, based on discriminatory governmental policies, which are linked to government control. This proves that government control is an important variable and must be taken into account when researching internationalizing firms that originate from SC nations. Additionally this finding will substantiate the argument that a multilayered approach must be taken, to properly exemplify the internationalization path of the firm, as country level variables influence firm level variables.

6. Empirical research: the influence of discriminatory policies on the

internationalization path of the firm

This chapter entails an analysis of China’s internal environment and of the internationalization paths of the four firms. It starts with an analysis of China’s institutional and the industrial environment, after which the internationalization paths of four firms are analyzed and elaborated separately. After each firm is researched separately, a link is made between its internationalization path and the influence of its external environment.

6.1 The institutional environment in China

In this study the institutional environment of China stands for the economic framework in which Chinese firms operate. In 1978 the Chinese government initiated the development of its OFDI framework, which enabled domestic firms to invest abroad. This framework went through multiple phases. Six phases are elaborated separately, to determine how the government influenced the FDI process of firms over time.

6.1.1 Six transitional phases

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Fig. 4: China’s annual OFDI flow, 1982-2009

This figure indicates the increase in OFDI from China over the past 30 years. This information is collected by combining data from SAFE and MOFCOM, which are government institutions from China.

Source: SAFE, Balance of payments; MOFCOM, annual statistical bulletin on OFDI

Phase 1: 1978-1983

The policy reforms started in 1978, as the Chinese government wanted to become more involved in the global economy (Rosen & Hanemann, 2009). The first FDI framework was created in 1979. It mainly focussed on SOEs and the creation of specialized development zones in China, where joint ventures created hybrids between SOEs and foreign firms entering China. The OFDI policies were very tight due to governmental inexperience and scepticism. Additionally foreign firms entering China were forced to set up an alliance with a Chinese firm or a greenfield plant (Walter, 2010).

Phase 2: 1984-1991

By 1984 the government realized the importance of global markets, as through OFDI foreign

technology, control over resources, access to overseas markets and foreign currency could be obtained (Voss, Buckley & Cross, 2008). This led to a new wave of policy changes in favour of OFDI. In 1984-1985 the government developed a regulatory framework. This enabled not just SOEs, but also other firms to apply for OFDI approval. The Chinese state however still lacked foreign currency, which meant that domestic firms first needed to obtain foreign currency before they were able to

internationalize. This caused a lag in the internationalization process (Walter, 2010).

Phase 3: 1992-1996

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valued SOEs and assisting them in international business (Voss et al., 2008). The government allowed a shareholding system, in which a minority share (<49%) could be sold off, to private investors through public offerings. By giving out shares the financial situation of the firm could be improved. The second big policy transformation was that firms could buy foreign currency in China, instead of first having to obtain it abroad (Lin and Schramm, 2003).

Phase 4: 1997-2000

Due to the Asia crisis in 1997 the Chinese government strengthened the control on foreign exchange, as many Chinese investors had speculated on foreign assets through which they lost large amounts of financial resources (Kaufman, Krueger & Hunter, 1999). This made it more difficult for Chinese firms to obtain foreign exchange and to internationalize (Voss et al., 2009). However not all firms were subjected to this treatment. The government had selected about 100 “national champions” with the potential to become global firms. These firms were therefore subject to financial and non-financial privileges (Szamosszegi & Kyle, 2011).

Phase 5: 2001-2006

Although China had formally applied to become a member of the WTO in 1995, its accession was not finalized until 2001 (Chen & Ravallion, 2004). With China’s entry into the WTO its FDI policies changed once again. The government decided to stop directly steering Hybrid firms in

internationalization and initiated a facilitating role (Luo et al., 2010). By 2004 the policy changes were finalized (Voss et al., 2008).

Phase 6: 2007-2011

In 2007 government support of OFDI further increased, due to the success of the previous policies and the enormous amount of foreign exchange that China owned (surpassing $1 trillion in 2006). This eased the access to foreign exchange and subsidies.

In 2009 more policies were initiated to decentralize the approval procedures. This made it easier for firms to manage their foreign exchange (Voss et al., 2008).

6.1.2 Summary of the six transitional phases

The six different phases exemplify the changes in the institutional environment that firms encountered over time. In the first three phases policy changes increasingly facilitated OFDI, but in the fourth phase policies were tightened to decrease OFDI expenditures due to the Asia crisis. The last two phases strongly increased OFDI opportunities, which is also noticeable in graph 1.

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6.2 Environment of the high-tech industry in China

High-tech is referred to as cutting edge technology or as the most advanced technology available, additionally sectors within the high-tech industry are classified as research intensive (Metz, 1969). Firms within this industry compete against each other on product and cost leadership. They maintain their competitive position investing in product and process innovations (Yang, 2005). The sectors that operate within the Chinese high-tech industry are aviation, electronics and communication, computer and office supplies, white goods, pharmaceutical and medical equipment (Zhang, Sun, Delgado & Kumbhakar, 2012). The high-tech industry is very important for China as it accumulates for approximately 20% of manufacturing within China and about 45% of total Chinese exports (Xing, 2011).

6.2.1 Transformations within the industry

In the last 30 years two major transformations occurred within the Chinese high-tech industry. These were enabled by previous changes in the OFDI policy framework. The first transformation began when the potential of China’s home market became internationally recognized around 1990. The second transformation began when the Chinese government wanted to redirected the industry focus from production and assembly towards product and service innovation activities. Both transitions will be discussed below.

6.2.1.1 Alterations in the focus of consumption – from exports, to exports and domestic consumption

Within the Chinese high tech industry the government is very important, as it dictates the economic framework in which the firms operate. The international market however also plays an important role, as the US, the EU and the Japanese market have enabled the Chinese high tech industry to grow (Abukari, 2013).

Before 1990 the Chinese industry focused on export goods. The change in China’s OFDI policy framework and the willingness of western firms to invest into China however changed this. The policy change in the first phase forced foreign firms to enter China through joint venture or by greenfield plant. This led MNC’s to investment capital and technology into the Chinese industry (Walter, 2010). These investments enabled the industry to grow to such an extent, that between 1985-1990 China’s domestic market become attractive for domestic and international companies. By 1990 almost all large MNCs had recognized this, which changed the focus of the Chinese industry completely, as

investments into China were now also aimed at serving domestic demand (Abukari, 2013).

6.2.1.2 Alterations in the focus of industry activities – from production to development activities

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This meant less focus on production activities and more focus on research and development (R&D) activities (Aburaki, 2013).

The transformation was complemented by OFDI policy changes in phase 3, which enabled state-related firms to obtain advanced western technology and knowledge more easily. Furthermore policies were initiated that promoted education and science in China. Therefore high tech science parks were developed and tax breaks were given to firms that invested in research and development (Stewart & Stewart, 2007). Additionally firms that wanted to invest in research and could also apply for industry subsidies (Aburaki, 2013). These policy changes led to an increase of investments in R&D. To exemplify, in 1996 the value of investments was RMB40 billion and reached RMB1.02 trillion in 2012 (Asian scientist, 2013).

6.2.2 Summary of the transformations within the Chinese industry

This analysis indicates how institutional policy changes caused and complemented industry shifts. The first shift was a result of a policy from phase 1 and redirected the focus of exports, to domestic and international consumption.

The second shift redirected the aim from production and assembly to research and innovation activities. Policy changes in phase 3 complemented this by helping state-related firms to internationalize, in order to obtain strategic knowledge and technology.

6.2.3 Effect of environmental shifts on the firm’s internationalization

Institutional theory (Powell and Dimaggio, 1991) and industry-based view (Porter, 1990) emphasize the importance of external pressures, as they give a deeper understanding into the internationalization path of the firm. Therefore the shifts in the institutional and industrial environment are incorporated. Furthermore the analysis shows that both external environments are related, as changes in the institutional environment effect the industrial environment.

6.3 The case companies

In this section the two Hybrids (Haier and ZTE) and the two POEs (Huawei and Lenovo) are analyzed. The analysis will have the same set up for each organization: a short introduction, the

internationalization strategy of the firm, the internationalization path and a summary. The summary includes how external pressures influenced the firms’ international expansion.

The Hybrids are characterized by their connections to the state. The state privileges these firms with financial and non-financial benefits.

6.3.1 Haier

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has applied throughout its internationalization is a mix of high quality control, local production, converting products to local demand and continuous innovation (Bonaglia, Goldstein and Mathews, 2007).

6.3.1.1 The internationalization strategy of Haier

Haier’s internationalization strategy is based on the ideology of its first CEO, Ruimin Zhang. His internationalization vision for Haier was to ‘first enter difficult advanced markets, and then go to easy underdeveloped markets’ (Kiran, 2004, p. 2). By doing this Haier became more competitive by competing against ‘the giants’ in the industry.

1984 – 1991: Haier’s domestic development – forming alliances to compete domestically

In 1984 the Qingdao Refrigerator Co. was almost bankrupt, while Liebherr (a German refrigerator manufacturer) had many resources and capabilities, but needed a Chinese partner to enter the Chinese market. This led to an international joint venture, which created Haier. The Qingdao Refrigerator Co. supplied market knowledge and Liebherr supplied technology and equipment (Duyster, Hu, Jacob & Lemmens, 2008).

Haier distanced itself from its competitors by focusing on high quality standards. Up until 1990 the main focus was on accurately supplying local needs, through innovation. This proved to be very successful and Haier was awarded with many prices for its outstanding products (Haier, 2013). In 1990 the Chinese government started to encourage domestic mergers and acquisitions. Haier’s prior success had not gone unnoticed and eighteen underperforming state owned firms were merged with Haier into the Haier group. This made Haier a diversified supplier of white goods. To induce these other products with Haier’s quality standards, a large domestic research facility was built in 1993. Haier’s strategy to continuously strive for high quality also proved successful for the other products. By the end of the 20th century Haier was the top supplier of white goods in China (Yunfeng & Jing, 2012).

1990 – 1997: Push into internationalization – focus on exports and technology alliances

Haier’s development of premium refrigerators and the increasing competitive pressures within the Chinese refrigerator industry in 1990 caused Haier to start its internationalization campaign. However resources and financial funds were low and management lacked experience in international business, which forced Haier to internationalize through agencies (Janjua, Ahmed, & Wasim 2013).

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Focus on R&D Alliances

Haier’s exports to developed countries were not just done to enlarge market share, but also to increase technological capabilities and brand awareness. The acknowledgement in refrigerator quality in 1992, enlightened western companies about the benefits of teaming up with Haier, which led to the

beginning of multiple successful technology alliances between 1993 and 2002. Within this period Haier entered into international technology alliances with Merlonic – Italy (1993), Mitshubishi – Japan (1993), GK Design – Japan (1994), Phillips – The Netherlands (1997), Metz – Germany (1997), C-Mold – US (1998), Toshiba – Japan, (1999), Sanyo – Japan (2002) and Sampo – Taiwan (2002). The focus on R&D operations at home and abroad strengthened Haier’s capabilities to such an extent, that in 1999 it was capable of starting its globalization strategy (Duyster et al., 2008)

1999 – present: Haier’s OFDI strategy – going global

In 1999 Haier’s globalization process took off. With the fundaments already laid out, Haier was capable of rapidly increasing its global market share. The only continent without a factory or research centre from Haier currently is South America.

Haier America

In 1990 Haier entered the U.S. market through exports, but import quotas and regulations prevented Haier from becoming a big time player (Deng, 2004). In 1999 Haier therefore decided to setup a large production facility in S. Carolina, with an additional R&D centre in Los Angeles to incorporate local demands into the refrigerator design. In 2002 it opened a trade centre in New York to lead Haier’s America operations (Duyster et al., 2008). Sales kept increasing which led to an expansion of the S. Carolina factory in 2004 (Bonaglia, Goldstein & Mathews, 2007). In 2005 Haier aimed to merge with Maytag to become a large player in the US market, however Whirlpool, the largest white goods supplier in the world, outbid them.

Haier Europe

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Haier Middle-East and Africa

To continue the globalization strategy in Africa and the Middle-East, alliances were formed with MNCs and local governments. In 2001 Haier opened the first joint venture factory, which was built with PZ Cussons in Nigeria. This factory was capable of manufacturing all Haier’s product lines at that time (Haier, 2013). In 2002 Haier opened its second joint venture factory in Africa, which was built together with (government owned) Tunisia Hachicha Group (China-Africa forum, 2013). In 2005 Haier setup a large business unit in Jordan to strengthen their market position in the Middle-East. Jordan was specifically chosen, as it is situated in the middle of the Middle-Eastern trading block. This made it possible for Haier to easily transport products within the trading block, as well as evade import tariffs (Haier, 2013). Currently the Haier group is negotiating with the governments of Iran, Egypt and South Africa to setup factories to increase local coverage (Haier, 2013).

Haier Asia

Haier’s first experiments in Asia were unsuccessful (Indonesia, 1995 and Pakistan 1998), but it succeeded in 2001. Haier formed a joint venture factory with Ruba group in Pakistan, to strengthen its market position in both Pakistan and India. Due to strong host country influences, Haier kept close ties with the Pakistani government. This led to the development of an international economic trading zone in 2006, making it easier to transport and sell products. Haier booked large successes in these

countries. In 2007 another factory was opened in India, to cover the demand (Accenture, 2013).

Haier Oceania

Haier entered the Oceanic market in 2005 by signing a deal with local partner Fisher & Paykel, a leading New Zeeland appliance manufacturer. Additionally Haier co-owns several factories with local partners, through which it supplies the local market. In 2009 Haier attempted to purchase a part of Fisher & Paykel, however these plans could not be realized (Accenture, 2013).

6.3.1.2 Summary

Haier’s internationalization path consisted out of three phases and has been influenced by the institutional and industrial environment. The analysis shows that connections to the Chinese state enabled it to diversify and globalize its operations.

In 1984 the institutional environment led to the formation of Haier, as the German refrigerator company Liebherr was forced to joint venture with a Chinese company (Qingdao Refrigerator Co.), before it could enter the Chinese market. This created Haier, a Chinese firm with western (more advanced) competences, which it used to become a large white goods supplier in China. Haier’s state connections enabled 18 more mergers with Chinese firms, which further enriched Haier’s resources and capabilities.

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developed R&D alliances with leading western companies, as these enabled access to advanced knowledge and technology. This complies with the second industry shift.

Haier’s globalization is typified by its large amount of OFDI investments within four years. Haier acquired and setup multiple R&D centres and factories around the world to customize local supply to demand. This sudden expansion can be related to the fourth institutional phase, in which many Chinese firms had no access to financial funds or foreign exchange, while a few selected firms were privileged in abundance.

Analyzing Haier’s internationalization path shows that the firm, the industry and the institutional environment are all related. Additionally direct institutional influences helped Haier to develop competences to internationalize and to globalize.

6.3.2 ZTE

ZTE is a global telecommunications equipment and network solution provider, founded in

1985, with headquarters situated in Shenzhen. ZTE was a state owned firm until 1997 until it got listed in the Shenzhen stock exchange. Currently the company delivers products and services to over 500 operators, in more than 140 countries (Hoover, 2013). In 2011 ZTE owned 17 R&D centres around the world, of which nine are located in China and the rest in Europe, US, India and Pakistan. ZTE also works with many domestic and foreign governmental research institutions on R&D projects. By 2012 the company obtained $13.5 billion in revenues and listed 89,786 employees (Telecom lead, 2013b; Godinho & Ferreira, 2012). ZTE aims to become and stay a global competitor in the telephone

equipment industry, by focussing on superior quality, low cost and customized technical solutions (Mi & Yin, 2005).

6.3.2.1 The internationalization strategy of ZTE

ZTE followed a cautious internationalization path. Even though it had access to large quantities of financial resources, it chose to tread carefully (Fan, 2005). Because of the competitive pressures within the telephone industry and China’s technology lag, ZTE chose to first build up international

experience and resources in developing markets, after which it would be more capable to enter

developed markets, as these contain stronger competitors. Throughout ZTE’s internationalization path, it kept manufacturing capabilities in China, as this insured high quality and low cost production. ZTE’s internationalization path can be structured in the following stages: 1. developing the core strategy, 2. internationalizing the core strategy and 3. globalizing the core strategy.

(1) 1985-1995: ZTE’s domestic development – developing the core strategy

ZTE was founded in 1985 as Zhongxing Semiconductor Co., Ltd. (Hoover, 2013). It was setup by various state owned companies affiliated to the Ministry of Aerospace Industry. China’s telephone equipment industry is protected by the Chinese government, to give domestic firms a chance to setup and develop competences of their own, as western telephone equipment manufacturers had a

An investigating on the influence of state capitalistic policies on the internationalization path of the firm

The rise of the emerging markets: