Top management team's formal network and international expansion of Chinese firms: The moderating role of state ownership and political ties

Jie Wu, Geoffrey Wood, Zaheer Khan

Research output: Contribution to journalArticlepeer-review

19 Citations (SciVal)

Abstract

This article explores the role of the formal network centrality of top management teams (TMT) for foreign expansion, looking at the case of Chinese firms. The former is defined by the degree to which top managers are connected with TMTs of other firms in formal ways, through service as independent board members. We explore boundary conditions, comparing state ownership with political ties. The analysis of a panel data of 489 firms expanding to 72 developed and developing host markets in the period 2000–2012 confirms that network centrality facilitates internationalization. We found that TMT network centrality had a stronger effect on internationalization in developed than emerging markets. Conversely, state ownership had a positive moderating effect in the latter and political ties a negative effect in developed ones. The literature on comparative institutional analysis suggests that formal ties are more important in developed economies, and informal ties in emerging ones. However, formal political ties and/or links to the Chinese state may be more of value in internationalizing into other emerging markets, where the balance of diplomatic power may be more skewed in China's favor.

Original languageEnglish
Article number101803
JournalInternational Business Review
Volume30
Issue number3
Early online date27 Jan 2021
DOIs
Publication statusPublished - 30 Jun 2021

Bibliographical note

Publisher Copyright:
© 2021 Elsevier Ltd

Keywords

  • Chinese firms
  • Diplomatic FDI strategies
  • Internationalization
  • Networks
  • Political ties
  • State capitalism
  • State ownership
  • TMT network centrality

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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