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Monica Ren

First Name: Monica
Surname: Ren
Department Dept of Marketing and Management
Supervisor(s): Dr. Robert Jack ,

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Paper Title

Internationalisation Motives, Risks Attitudes and Entry Modes: A Comparison Study Of Chinese Mining SOEs and NSOEs

Purpose

The aim of our research is to facilitate a better understanding of the causes, motivations and implications of the internationalisation of State-owned enterprises (SOEs) and Non-state-owned enterprises (NSOEs) from China’s mining sector.

Originality

By drawing on distinctions between SOEs and NSOEs, we seek to make a contribution to the emerging literature on Chinese outward foreign direct investment (OFDI). We argue that logical extensions to established internationalisation theories and concepts can be made to Chinese mining OFDI, with the value being to highlight potential qualifications or consistencies with existing paradigms

Key literature/theoretical perspective

The extant literature implies that institutional support may shape the motivations of both firms. The institutional-based view asserts that the strategies behind a firm’s OFDI decisions is affected by ‘the rules of the game’ – namely, the host country institutions. It is argued that institutional theory is the most useful approach when studying business strategy in emerging economies. The theory can assist in explaining the distinctiveness in the behavior of outward investing from Chinese mining firms, since the ‘home’ institutional environment is formally and informally enforced by government and its agents, and which bears upon the norms and cognitions that influence investment behaviour

Design/methodology/approach

Our research adopts an exploratory, multiple case study comprising three SOEs and three NSOEs from China’s mining sector. Interviews, lasting between 60 and 120 minutes, were conducted with both CEOs and five senior managers directly involved in each firm’s international operations. Open-ended questions were utilised focusing on motivations, risk attitudes, market entry modes choices as well as impediments and incentives for internationalisation.

Research limitations/implications

Two important implications can be drawn from the empirical findings. First, multiple motivations apply for Chinese mining firm internationalisation. Second, institutional factors influence both firms’ (SOEs & NSOEs) risk attitudes and multinational experience and helps determine their location choices.

Practical and Social implications

Institutional distinctiveness leads to two sets of multiple motivations for SOEs and NSOEs. Therefore, managers cannot view them in an isolated manner. Such an understanding would help managers develop relevant strategies and generate negotiation skills to deal with Chinese mining SOEs and NSOEs.

Keywords

Internationalisation, motivations, risk, entry modes, China.