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The Limits of Guanxi for Chinese Nationals Doing Business Abroad: Empirical Investigation into Chinese Companies in Germany

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  • Lan Lin
  • Dai Wang
  • Yue‐Fang Si

Abstract

In the last ten years, Chinese outward direct investment (CODI) has undergone dramatic development. It has become increasingly important on the global stage. This paper attempts to integrate the guanxi concept into the Uppsala internationalisation process model to explain CODI motivation, location choice and knowledge acquisition channels. It reveals that Chinese investment in Germany is mainly driven by the desire to explore markets and to search for strategic resources. It favours location rich in network resources. Guanxi acts as an important channel of knowledge acquisition, but it is not as important as contractual linkage because of the limited professional and industry‐related knowledge in the local Chinese community. Chinese capitalism has been shaped into a hybrid form that incorporates both modern corporate management and traditional guanxi utilisation. Research which ignores or overemphasises the role of guanxi could lead to an incorrect understanding.

Suggested Citation

  • Lan Lin & Dai Wang & Yue‐Fang Si, 2018. "The Limits of Guanxi for Chinese Nationals Doing Business Abroad: Empirical Investigation into Chinese Companies in Germany," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 109(3), pages 420-433, July.
    • Handle: RePEc:bla:tvecsg:v:109:y:2018:i:3:p:420-433
    DOI: 10.1111/tesg.12301
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    Cited by:

    1. Lisha He, 2022. "Spatial Linkages in Chinese Service and Manufacturing Outward Fdi: Empirical Evidence From the United States," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 113(5), pages 450-468, December.
    2. Sebastian Losacker & Ingo Liefner, 2020. "Implications of China's innovation policy shift: Does “indigenous” mean closed?," Growth and Change, Wiley Blackwell, vol. 51(3), pages 1124-1141, September.
    3. Bagci Utku Eren & Franz Martin & Yavan Nuri, 2022. "Ethnic networks in the internationalization of Turkish food producers," ZFW – Advances in Economic Geography, De Gruyter, vol. 66(4), pages 201-210, November.

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