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The different influences of the government and politicians on the international expansion of Chinese firms

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Abstract

This paper examines the influences from the political sector on international expansion of Chinese firms. In analyzing the political sector, we distinguish between ‘formal institutional influences from the government’ and ‘informal relational influences from elite politicians.’ We argue that the government can pressure emerging-market firms to expand abroad despite the risk when outbound globalization is the national policy. However, networks with powerful politicians can discourage international expansion since sufficient domestic returns provided by the political connections can lead to lower motivation for internationalization. The governmental pressures toward internationalization can be moderated by firm size and relational networks with powerful politicians.

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Notes

  1. The value has increased above 0 after the year 2014, but still remains at a very low level.

  2. The results from running the negative binomial regressions are essentially the same. The main effect of the geopolitical network lost significance in the fully specified model where all the interaction terms were entered, probably because of the correlation between the geopolitical variable and the interaction term between the geopolitical and the state control variable. However, the geopolitical network was negative and significant in all other models, providing some support for Hypothesis 4. All other hypotheses were equally supported in negative binomial models as in Poisson models.

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  1. Yonsei Business School, Yonsei University, Yonsei-ro 50, Seodaemun-gu, 03722, Seoul, Republic of Korea

    Grimm Noh & Dongyoub Shin

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Noh, G., Shin, D. The different influences of the government and politicians on the international expansion of Chinese firms. Asian Bus Manage 17, 366–396 (2018). https://doi.org/10.1057/s41291-018-0044-8

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