China's Foreign Direct Investment Enterprises Ability System Transfer

Although the developed countries have directed the global direct investment for a long time, the developing countries have also expanded the overseas market as well in recent 30 years, of which there comes up a batch of Multinational Companies(MNCs). The scholars and practitioners have already shown their interests on this kind of phenomenon. In fact, as one essential part of transnational operations research, the trend of development and the competence of enterprises performing outward direct investment(ODI)from the developing countries have gradually become the commonly concerned topics.However, as far as the literatures home and abroad, there is little research on the ODI by the enterprises from the developing countries. Most of researches still covers the macro-level including the situation of the developing countries, international environment, industry, policy etc., and almost avoids the analysis of enterprises, which is more micro-level. One of the reasons is because the quantity and quality of the enterprises performing ODI from the developing countries are not obviously observed, and then it is hard to find the convincible theoretic results. The other reason is the enterprises performing ODI from the developing countries are reluctant to disclose the information, which makes difficult in obtaining the numbers and costs time and energy to have field work. Accordingly, the research on the enterprises performing ODI from the developing countries is now on its first stage, which means there are no systematic theories or practices at hand for reference.The enterprises performing ODI from China, which is the largest developing country, has reached a significant level. It should be seen that under the circumstance of the same home country, the enterprises which "go outside" are much different with those which stay at home, and even the Chinese enterprises which "go outside" are different with each other. Thus, it would be so meaningful to research on the construction and transfer of the capability systems of the enterprises from inside.After clarifying the background and topic of the research, the dissertation collects the information from the specific and accountable database, and then makes a systematic and complete analysis of the foundations, process, mechanism and performance of the transfer of the capability systems of the Chinese ODI enterprises. The research scope covers specifically: (1) What do the capability systems of these Chinese ODI enterprises include?(2)What is the foundation of the transfer of the capability systems of the Chinese ODI enterprises? What are the motivations and barriers? (3) the process, mechanism and mode choice of the transfer of the capability systems of the Chinese ODI enterprises; (4) the effects of the entry mode of the Chinese ODI enterprises on the performance of the transfer of the capability systems.Taking 334 valid samples of Chinese ODI enterprises from Jiangsu, Shanghai and Zhenjiang as the research objects, the paper tests the hypotheses by using some statistical methods such as Multinomial Logistic Regression, Factor Analysis, ANOVA and Descriptive Statistics. The results are as follows:1,The entities of China's ODI have transformed from sole State-owned enterprises to various types of enterprises, and the private ones have become "dark horses".China's ODI still mainly focuses on the later developing areas such as Asia, Africa and Latin America, and the transferring ladder of capability system shows that Chinese enterprises will transfer their adjusted capability systems to the local partners or suppliers in the later developing areas.The foreign investors have provided the Chinese ODI enterprises with their outputs and support to complete and solidify the capability systems of the Chinese ODI enterprises. In this case, for the later developing MNCs like the Chinese ones, the inward internationalization is the foundation and condition of the outward internationalization.2,The conceptual model of the capability systems of the Chinese ODI enterprises has been empirically supported. The system consists of five components: marketing capability, organizational and strategic capability, innovative capability, manufacturing capability and financial capability. Manufacturing capability is the relative advantage of the Chinese enterprises, the innovative one and the marketing one are relative weak, while the organizational and strategic one and the financial one are the basic capabilities as the enterprises exists.3,The transfer process of the capability systems of the Chinese ODI enterprises is divided by four stages: recognize, transform, adapt and perform, the first two of which occur in China, and the later two of which happen in the overseas.4,Different Chinese ODI enterprises have their different capability systems, and then they will choose different entry modes. The Chinese ODI enterprises who boast the stronger marketing capabilities will prefer higher controlling power when they transfer the capability systems; while the Chinese ODI enterprises who boast the stronger financial capabilities will prefer lower controlling power; and the other three capabilities have no significant effects on the choice of controlling power.5,The choice of entry mode the Chinese ODI enterprises make when transferring the capability systems will affect the performance, and the empirical study shows that they are positively related.6,In terms of the managerial control of the Chinese ODI enterprises, strategic decisions, financial affairs, daily operations and recruitment of top management all are positively related to the performance generated by the capability system transfer.Based on the above study, the dissertation states that the Chinese ODI enterprises should not only emphasize the construction of their own capability systems, but also transfer the competitive ones to their overseas subsidiaries successfully, and assist them to grasp the growth opportunities promptly in the host countries(especially the later developing ones). There are four aspects of suggestions: (1) to develop the global management skills of the capability systems; (2) to emphasize the balance of the construction of the capability systems; (3) to expand the channel of the construction of the capability systems; (4) to optimize the environment of developing and transferring the capability systems.The research not only complements the ODI theory of the developing countries, but also provides their enterprises, Chinese ones in particular, with more innovative theoretic statements when they choose "later developing countries" as the main hosts to invest in.