The strategic decisions and success factors of the global integration-local responsiveness of Japanese MNCs in China

Yunshi Mao, Jiancheng Wang
2007 Frontiers of Business Research in China  
This article applies Foreign Direct Investment (FDI) theories to the strategic management analysis of the global integration-local responsiveness of multinational corporations (MNCs) in China, from the perspective of company characteristics (ownership advantages and internalization advantages) and environmental dynamics (locational factors) in order to analyze the success factors influencing the sales activities of Japanese MNCs in China. Based on the analysis of a survey conducted on 230
more » ... se parent companies with investments in China, the empirical research findings include: Japanese MNCs in China favor global integration strategies; the more significant the ownership advantages and internalization advantages are, the greater the global integration is; the success factors of their operations in China due to global integration are present in manufacturing know-how, procurement of parts and supplies, financial power, previous investment experience in China as well as sales networks and technologies; locational advantages mainly lie in labor cost among other things; internalization factors do not have any significant correlation with the success and performance of the subsidiary company. since the 1980s, Japan's investment in China has been signifi cantly higher than England, Germany, France and other European developed countries, with 9-recorded years of surpassing the United States and achieving the number one position in the direct investment in China amongst developed countries. In 1998 and 2001, Japanese MNCs with Chinese operations amounted to 2,426 and 2,467 respectively, second only to the United States.
doi:10.1007/s11782-007-0005-0 fatcat:eynqimggfrelljre6vydcnrhmq