Location choices at the subnational level perspective: the case of the Volkswagen Group in BRIC countries

Fu, Lu; Ogasavara, Mário Henrique; Filho, José Milton de Sousa

doi:10.1504/ijcm.2018.091496

Cited by 1 publication

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“…With a 20 percent of state equity, Germany's Volkswagen gained the sixth rank, indicated by revenues, US$240 billion. The group owns/manages 12 assembly plants in China (23 percent of market share in the passenger cars segment), six in Brazil (21 percent), three in India, and two in Russia (Fu et al, 2018). In sum, SOEs operate in large-scale economics such as public utilities (electricity, water, and gas), mining, oil and gas industries, and financial services.…”

Section: Performancementioning

confidence: 99%

Institutionalization to internationalization

Redding

Xie

Tang

2018

IJPSM

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Purpose The purpose of this paper is to examine the most interesting research question of the past decade – What Lures the Bears? Leveraging the public sector management and international business strategy literature, the paper first presents an overview of the transformational dynamics of state-owned enterprises (SOEs) in three major phases – institutionalization, privatization, and corporatization, and internationalization. Then, it analyzes geographic patterns and industry trends of the outward foreign direct investment (FDI) projects announced by SOEs over an eight-year period. Design/methodology/approach Grounded in the exploratory research such as inductive and deductive logic, the study proposes theoretical constructs, and discusses several findings based on the data accessed from highly cited archival sources, such as the UNCTAD FDI stat/WIRs, the World Development Indicators, Doing Business Report, Global Competitiveness Report, the Index of Economic Freedom, the Academic Ranking of World Universities, and the Fortune Global 500. Findings Based on an analysis of global market trends (a sample of over 20 countries and five industries), the study highlights that SOEs from Asia and Europe have been greatly expanded into developed markets, thus to secure natural resources, to acquire strategic assets like technology, and to leverage the developed financial markets and better investment environment. Therefore, SOEs’ outward FDI strategy and overseas performance was driven by institutional transitions, resource security, home market development and government legitimacy may contribute to the competitive advantage of their home country. Practical implications The study offers several implications for the policymakers of the governments in emerging economies and bureaucratic management of SOEs. It recommends that state ownership pattern and bureaucratic system of SOEs need to be reexamined, revised, and corporatized in the changing dynamics of the multinational business environment, thus to secure resources, acquire technological know-how, and compete in home and global markets. Originality/value As a response to academic calls on the globalization, performance and governance mechanisms of SOEs in and out of emerging economies, this paper draws a unique presentation of the transformational dynamics of SOEs – establishment to internationalization.

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Section: Performancementioning

confidence: 99%