Research On The Key Factors Of Latecomer Enterprises' Overseas Localization

With the acceleration of global economic integration,the relations and mutual dependency between various countries have been enhanced.In this globalization tide,reverse investment of latecomer enterprises in developed countries take on an increasingly accelerating trend.For latecomer enterprises,it is a huge challenge to compete against developed countries' firms in the complicated international market.As latecomer enterprises gain access to developed countries,they are always rejected as outsiders,owing to host country's different institutional environment and disadvantage of technology and market.Obviously,to overcome developed countries adverse conditions,latecomer enterprises should implement localization strategy which is of great significance to expand the international development space.Thus,the purpose of this study is to build a theoretical model on the influencing factors of overseas localization strategy with in-depth analysis of typical cases by grounded theory research.On this basis,this paper will do further development of empirical research to analyze the influencing mechanism of key factors.At the grounded analysis stage,Firstly,after collecting information extensively,we explore each one of the key elements in the process of overseas localization by open coding,axial coding and selective coding three steps.Then,we define natures of those elements by combining the original data of the cases and build the key factors model of overseas localization.The model shows,social network embeddedness as the preprocess factor,strategic flexibility as the catalytic factors and organization legalization as the dominant factor.At the empirical research stage,go a step farther to investigate the mechanism of how social network embeddedness influence organization legalization,and how strategic flexibility exerts the function of modification between social network embeddedness and organization legalization,putting forward the hypotheses and a “E-F-L” localization empirical model.Finally,using questionnaires,statistical analysis and other means to verify the hypotheses,and the regression models show that the various dimensions of social network embeddedness has positive impacts on the various dimensions of organization legalization,and strategic flexibility has adjusting impact on this relation,but the effect is not balanced.Aspects in significant results include that coordination flexibility has significant adjusting effect on the various dimensions of social network embeddedness and organization legalization,and resources flexibility has significant adjusting effect on the level of relational embeddedness and the various dimensions of organization legalization.However,resources flexibility has insignificant adjusting effect on the level of structural embeddedness and the various dimensions of organization legalization,which suggests that latecomer enterprises should pay attention not to fall into “ resource dependence traps” as using resources flexibility.This study enrich the theories related to latecomer enterprises localization strategy as well as provides a reference to latecomer enterprise strategy making,which has practical significance for latecomer firms to achieve international development.