Internationalization of Ethnic Chinese-Owned Enterprises: A Network Approach

Abstract

Research into ethnic Chinese-owned enterprises¹ has identified social and business networks as powerful determinants of the economic success of Chinese entrepreneurs in Southeast Asian economies (Redding, 1995; Brown, 1995). In recent years the network concept has frequently been used to explain typical organizational structures as well as the internationalization process of ethnic Chinese-owned multinational enterprises (CHMNEs) (Kao, 1993; Yeung, 1997a). There seems to be a general agreement in the literature that the corporate governance and business system of Chinese enterprises are greatly affected by the social and personal relations of their entrepreneurs (Redding, 1990; Whitley, 1990, 1991, 1992). Hence, a better understanding of how these entrepreneurial networks of CHMNEs might assist in reducing transaction costs and substitute for deficiencies in their resource-based ownership advantages is a relevant research topic. An important concern in research about the internationalization process, strategic setting, control and organization is also to find out how and to what extent these social and personal networks affect CHMNEs in their building of successful cross-border inter- and intra-firm linkages.