Abstract:While China ' s outward direct investments continue to soar, many Chinese fi rms reportedly face social resistance in host countries during the internationalization process. We explore this phenomenon from a country-of-origin ( COO ) perspective using Fiske and colleagues' (Fiske, Cuddy, Glick, & Xu, 2002 ;Fiske, Xu, Cuddy, & Glick, 1999 ) stereotype content model. Our fi ndings from a recent case in New Zealand show that China ' s COO emerges as a key variable infl uencing how local actors view Chinese invest… Show more
“…The well-established factor markets in developed economies provide MNCs with access to multiple resources, including financial capital, advanced technology, managerial expertise, and skilled labor (Hoskisson, Wright, Filatotchev, & Peng, 2013), and the highly developed institutional configurations enable firms to build up strong learning processes that they can exploit internationally (Ramachandran & Pant, 2010). Furthermore, developed economies, such as the United States, Germany, and Japan, have developed positive country images, which are characterized by reliable corporate governance and superior economic performance (Yu & Liu, 2016). The positive country images grant developed market MNCs the legitimacy to adopt their standardized HRM practices and even provide them exemptions from fulfilling some local requirements (Ferner, Quintanilla, & Varul, 2001).…”
Section: The Standardization Versus Localization Debatementioning
confidence: 99%
“…As a result, foreign subsidiaries often experience higher costs of investing, operating, and managing in the host country than local firms do (Pant & Ramachandran, 2012). While liabilities of foreignness are common obstacles for all MNCs in foreign markets, LOR is particularly prominent among emerging market MNCs operating in developed economies, such as Chinese MNCs in the United States (Yu & Liu, 2016).…”
Section: Chinese Mncs In Developing Versus Developed Marketsmentioning
Despite the rapid growth of Chinese outward foreign direct investment in developed markets, many Chinese multinational corporations (MNCs) suffer from liabilities of origin (LOR)-capability-and legitimacy-based disadvantages associated with the country of origin. This study identifies localization as a strategic mechanism through which Chinese MNCs overcome their LOR. With a specific focus on human resource management (HRM), we examine how factors associated with firms' perceived LOR, including springboard intent, local competition, and host country regulatory pressures, affect Chinese MNCs' adoption of local HRM practices in developed markets.We differentiate HRM practices that managers intend to adopt from those that are actually implemented and explore how state ownership affects the intentionimplementation gap. Based on a sample of Chinese MNCs in the United States, we find that springboard intent, local competition, and host country regulatory pressures are positively associated with intended, but not implemented, HRM localization. Further examination demonstrates that springboard intent and local competition have significant effects on implemented HRM localization among private businesses but not in state-owned enterprises (SOEs). The managerial constraints and resource endowment of Chinese SOEs may hinder their overseas subsidiaries from implementing local HRM practices to address LOR.
K E Y W O R D Sinternational HRM, strategic HR, international strategy, institutional theory
“…The well-established factor markets in developed economies provide MNCs with access to multiple resources, including financial capital, advanced technology, managerial expertise, and skilled labor (Hoskisson, Wright, Filatotchev, & Peng, 2013), and the highly developed institutional configurations enable firms to build up strong learning processes that they can exploit internationally (Ramachandran & Pant, 2010). Furthermore, developed economies, such as the United States, Germany, and Japan, have developed positive country images, which are characterized by reliable corporate governance and superior economic performance (Yu & Liu, 2016). The positive country images grant developed market MNCs the legitimacy to adopt their standardized HRM practices and even provide them exemptions from fulfilling some local requirements (Ferner, Quintanilla, & Varul, 2001).…”
Section: The Standardization Versus Localization Debatementioning
confidence: 99%
“…As a result, foreign subsidiaries often experience higher costs of investing, operating, and managing in the host country than local firms do (Pant & Ramachandran, 2012). While liabilities of foreignness are common obstacles for all MNCs in foreign markets, LOR is particularly prominent among emerging market MNCs operating in developed economies, such as Chinese MNCs in the United States (Yu & Liu, 2016).…”
Section: Chinese Mncs In Developing Versus Developed Marketsmentioning
Despite the rapid growth of Chinese outward foreign direct investment in developed markets, many Chinese multinational corporations (MNCs) suffer from liabilities of origin (LOR)-capability-and legitimacy-based disadvantages associated with the country of origin. This study identifies localization as a strategic mechanism through which Chinese MNCs overcome their LOR. With a specific focus on human resource management (HRM), we examine how factors associated with firms' perceived LOR, including springboard intent, local competition, and host country regulatory pressures, affect Chinese MNCs' adoption of local HRM practices in developed markets.We differentiate HRM practices that managers intend to adopt from those that are actually implemented and explore how state ownership affects the intentionimplementation gap. Based on a sample of Chinese MNCs in the United States, we find that springboard intent, local competition, and host country regulatory pressures are positively associated with intended, but not implemented, HRM localization. Further examination demonstrates that springboard intent and local competition have significant effects on implemented HRM localization among private businesses but not in state-owned enterprises (SOEs). The managerial constraints and resource endowment of Chinese SOEs may hinder their overseas subsidiaries from implementing local HRM practices to address LOR.
K E Y W O R D Sinternational HRM, strategic HR, international strategy, institutional theory
“…On the contrary, a negative image abroad can also disturb country firms when internationalizing. This is the case of China, reported by Kreppel and Holtbrugge (2012) and Yu and Liu (2016), whose firms and its products still deal with the challenge of a negative image of the country when investing abroad.…”
Purpose
The purpose of this paper is to explain a possible relationship between the country brand and internationalization topics, searching in the literature the possible connections between them.
Design/methodology/approach
An integrative literature review of the past 15 years of research (2003–2017) was acquired using the well-known databases Web of Science and Scopus.
Findings
Studies linking country brand and internationalization are new, often quantitative, descriptive and focused on emerging markets. In terms of content, it was shown first that a country brand, when well-managed, is not only essential to attract foreign direct investment into the country, but it can also help the outflows of investments. Referring specifically to outflows of foreign investment, internationalization affects the country brand, generating positive attitudes toward the brand in international markets. However, it is also affected by the country brand because the country image influences the entry modes of business and the country of origin affects the performance of multinationals abroad.
Research limitations/implications
With the strengths and deficiencies of a body of literature exposed in this paper, a better understanding of the topic through synthesis can be provided.
Practical implications
Findings show that internationalization can influence country brand and country image. The internationalization process might positively affect the attitude toward a place brand. In terms of country image, when a company rebranding is entering international markets, it can integrate the brand of its products with the country brand and its image, generating positive effects in relation to brand in the new market. However, this relationship is not clear and should be explored by new studies.
Originality/value
This paper contributes both to the literature through an overview of the relationship between the two topics and a research agenda for future studies; and to governments and companies by providing information that enables them to become more competitive in the international market.
“…As mentioned earlier, firms from emerging economies face foreignness while entering industrial countries due to the institutional embeddedness in the home country (Epstein, 2019). When FDI is impacted by resource‐seeking behavior, firms from emerging economies face even more regulatory scrutiny because of their origin (Shapiro et al, 2018; Yu & Liu, 2018). Facing such regulatory scrutiny is a challenge for firms from emerging economies, which is why these firms find that it is easier to operate in economies with smaller institutional distance.…”
Section: Development Of Hypotheses and Theoretical Frameworkmentioning
confidence: 99%
“…When FDI is impacted by resource-seeking behavior, firms from emerging economies face even more regulatory scrutiny because of their origin (Shapiro et al, 2018;Yu & Liu, 2018). Facing such regulatory scrutiny is a challenge for firms from emerging economies, which is why these firms find that it is easier to operate in economies with smaller institutional distance.…”
Section: Fdi Location Resource Endowment and Institution Distancementioning
This research extends the research into foreign direct investments (FDIs) from emerging economies by integrating locational advantage perspective and institution‐based view to empirically analyze the interactive effect of resource endowment in a host economy and how institutional regulations impact on location choice of investors from emerging economies. Our analysis is based on Chinese outward FDI in 36 Asian and Oceanian economies. Empirical findings indicate that resource endowment is contingent upon regulatory institutions from both home and host country settings. Whereas the political risk bears positive influence over FDI and resource endowment, institutional distance and economic freedom have negative impact, which indicates that resource endowment is more appealing to investments from Chinese firms when institutional distance and economic freedom are low and political risk is high.
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