Do State-Owned and Non-State-Owned Multinationals Behave Differently in Internationalisation? – A Case Study of Sinopec and Huawei.
[Dissertation (University of Nottingham only)]
Internationalisation of firms has become a significant trend following the increasingly intense economic globalisation. The expansion of emerging economy multinational enterprises (EE MNEs) has reshaped the international business landscape and thus has attracted more scholars to research two fundamental types of them according to the ownership status: state-owned and non-state-owned MNEs. Utilising a theoretical framework that integrates industry-based view, resource-based view, and institution-based view, this dissertation aims to discover the distinctive internationalisation behaviours of these two types of EE MNEs compared to conventional MNEs. In specific, the dissertation examines the differences in internationalisation behaviour between state-owned and non-state-owned MNEs with regard to internationalisation speed, internationalisation path, and entry mode choices. The research uses case study approach and employs Sinopec and Huawei as case companies.
A great number of interesting findings emerge from this research. First, the differences of competitive advantages, diverse motivations of internationalisation, and ownership status between state-owned and non-state-owned MNEs lead to their divergences of internationalisation speed, expansion path, and entry mode. To further illustrate, although state-owned MNEs are inferior in competitive advantages they simultaneously enter developing and developed countries at an accelerated speed mainly through acquisitions. By comparison, relying on advanced technology, non-state-owned MNEs expand overseas gradually in a single path by establishing joint ventures and wholly-owned subsidiaries. Second, the analysis of these two types of EE MNEs needs to go beyond firm boundary. Based on Peng’s model, the case study emphasises the role of resource-based view and institution-based view in both home country and host country context to explain the internationalisation behaviours of state-owned and non-state-owned MNEs. In particular, the institutional factors in host countries significantly impact the internationalisation of non-state-owned MNEs (they initially establish joint ventures with local partners overseas to overcome the liability of foreignness and then transfer to wholly-owned subsidiaries to prevent the leakage of knowledge and technology in host countries). The influences of institutional factors in home countries are more prominent on non-state-owned MNEs than state-owned MNEs because state-owned MNEs may take advantage of state ownership advantage or direct government support to further their internationalisation. Third, the dissertation tests the traditional theories whereby the Uppsala model fails to explain the internationalisation paths of these two types of new MNEs but Peng’s model, particularly institution-based view, is generally consistent with the internationalisation behaviours of state-owned and non-state-owned MNEs.
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