Asia Pacific Journal of Management

, Volume 34, Issue 1, pp 69–96 | Cite as

Internationalization within networks: Exploring the relationship between inward and outward FDI in China’s auto components industry

  • Peter Hertenstein
  • Dylan Sutherland
  • John Anderson
Article
First Online:

Abstract

We explore how the outward FDI strategies of Chinese auto component multinational corporations (MNCs) are shaped by sub-contracting supply relationships established with developed market MNCs. We argue the strong presence of foreign MNC business networks developed through prior inward FDI constitutes an important home country effect influencing the outward FDI strategies of emerging market MNCs. Using the updated internationalization process model, we show how commitment to business networks is a critical mechanism driving the internationalization trajectories of Chinese auto component MNCs. This includes geographic location choices to psychically distant developed markets, strategic asset seeking orientation, pace of internationalization, and entry mode decisions.

Keywords

Inward-outward FDI linkages Business networks Internationalization process model Auto components China 
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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Peter Hertenstein
    • 1
  • Dylan Sutherland
    • 2
  • John Anderson
    • 3
  1. 1.University of CambridgeCambridgeUK
  2. 2.Durham UniversityDurhamUK
  3. 3.University of Northern IowaCedar FallsUSA

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