Different Roads to Rome? Patterns of Internationalization in Chinese Firms

Abstract

Existing findings on the internationalization of firms have largely been based on studies of firms from developed economies, following the knowledge-development process model of increasing commitment from export to foreign direct investment, and emphasizing firm-specific advantages and outward activities (Johanson & Wiedersheim-Paul, 1975). Such studies are, however, less informative about how firms generate competitive advantages in the first place. Studies that have examined the role of inward activities in firms’ internationalization suggest that firms can be integrated into the global economy through inward activities (Loustarinen & Welch, 1997; Welch & Loustarinen, 1993) or upstream internationalization (Kuada & Sorensen, 2000). Inward activities play an important role in the internationalization process of firms, particularly for firms from emerging market economies, such as China, where many firms start the internationalization process by becoming customers or joint venture partners of foreign multinationals. Thus, inward activities provide an alternative approach to beginning the internationalization process.