CHINESE FIRMS

Internationalization of Chinese Firms

Table of Contents

Chapter 1: Introduction3

1. Introduction to the Study3

1.1 Background of the Study5

1.2 Statement of the Problem9

1.3 Purpose of the Study11

1.4 Significance of the Study12

Chapter 2: Literature Review18

2. Theoretical Research18

2.2 Concept of Cross Border Merger and Acquisition21

2.3 Steps of Cross Border Merger and Acquisitions23

Chapter 3: Research Methodology25

3. Steps of Cross Border Merger and Acquisitions25

4. Risk of Cross Border Merger and Acquisitions27

Table 1: Stages of MNE growth in Japan and China.34

5. Comparison of Development of the Cross Border M&A in China and Abroad34

5.1 Resource Drivers of Internationalization38

6. Case Studies of Merger and Acquisitions39

6.1 Nanjing Automobile's Merger39

6.2 Lenovo's Merger with IBM41

6.3 TCL Merger with ALCATEL42

6.3.1 Unsuccessful Merger43

6.4 Haier's and Matsushita's Internationalization44

6.4.1 Haier Electronics Group45

6.4.2 Matsushita Electric Industrial Co., Ltd46

6.5 Comparison of the Internationalization of Haier and Matsushita47

Figure 3 Comparison of internationalization process in Haier and Matsushita49

6.5.1 Institutional Drivers49

7. Discussions55

7.1 Problems Faced by Chinese Firms (Internal and External)57

7.1.1 Research and Development Failure57

8. Remove Cultural Differences59

9. Conclusions64

References66

Chapter 1: Introduction

1. Introduction to the Study

The nature of international business is changing with an increasing amount of international trade and investment being conducted solely between firms located in developing or lesser developed countries (LDCs), and this is especially evident in Asia (Ahearne, Fernald, Loungani, & Schindler, 2003). However, much of the international business research being conducted around the world begins using frameworks developed in Western contexts to study multinational enterprises (MNEs). These frameworks contain underlying assumptions based on values and conditions that are predominant in the cultures of the more developed economies (London & Hart, 2004, p. 352) and may not produce optimal results when used to study business activities in different environments. There is a well recognized need for studies that explore business conditions in the developing world that use perspectives other than those of the MNEs (London & Hart, 2004; Meyer, 2004; Ramamurti, 2004; Ricart, Enright, Ghemawat, Hart, & Khanna, 2004). This study is in response to the calls in the literature for expanding the breadth of international business (IB) research to include cross border business activities not normally examined by IB researchers.

The study is intended to make an exploratory examination of the internationalization strategies of firms originating from a developing country, Thailand, while expanding into and operating in the lesser developed neighboring country of Cambodia. There is a pressing need for exploratory academic research that can be used to create or modify existing IB theories for use in studying IB activities in the developing and the least economically developed areas of the world.

Economists, political scientists, and development specialists have devoted considerable time in studying business conditions in the least developed regions of the world.

The intention of most of this work is to provide information that will assist in the decision making of governments and international organizations such as the United Nations (UN).

While this work is important, it should be remembered, for the most part, nations do not conduct international business, private firms do, and therefore the study of individual firms and their operations by IB researchers in the less developed regions of the world ...