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Determinants of Location and Roles of MNE Subsidiaries in China

In: Multinationals in China

Author

Listed:
  • Si Zhang
  • Robert Pearce

Abstract

In this chapter we assess the influences of 17 factors that have the potential to determine the location of MNEs’ subsidiaries in China. This can be seen to build on two dimensions of heterogeneity or diversity that have been central to our earlier discussion and analysis. The first of these is the strategic diversity that MNEs operationalise through their subsidiaries and the potential for them to address market-seeking, efficiency-seeking and knowledge-seeking motivations. The second factor is that we see China as not only a very large economy but also a very diverse one, so that particular characteristics of individual regions, provinces or cities may attract MNEs and determine the specific role to be played by subsidiaries. Thus it is well known that many leading MNEs, including parent companies of many respondents to our survey, now operate through several subsidiaries in China with each likely to contribute in different ways to the diverse competitive objectives of the group. It would then follow that, with individual subsidiaries expected to contribute in quite specific ways to this overall strategic programme in China, the selection of an ideal location will be an important and subtle decision.1

Suggested Citation

  • Si Zhang & Robert Pearce, 2012. "Determinants of Location and Roles of MNE Subsidiaries in China," Palgrave Macmillan Books, in: Multinationals in China, chapter 6, pages 117-137, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-36542-1_6
    DOI: 10.1057/9780230365421_6
    as

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