IJMB Journal – Abstracts
International Journal of Management and Business
IJMB Volume XI, Issue 1
Strategic Investment of Chinese Auto-parts Companies in US Market: Intentions and Challenges in Creating Sustained Competitive Advantages
Kinfu Adisu
Assistant Professor of Management and Marketing
Southern Illinois University Edwardsville
E-mail:kadisu2003@yahoo.com
ABSTRACT
The purpose of this article is to investigate the Chinese investment in US and their intentions. Extensive literature review and secondary data is used for this study. Our finding indicates the following: Chinese companies are entering through M & A and Greenfield. They also face great challenges such as political backlash from the US policy makers, especially in electronic and technology, agricultural and medical related firms as it is considered security risk. The closeness of the Chinese government to the firms is also an issue as the firms are not motivated by profit but practicing policy mandate from their government. The firms have liability such as cultural difference, foreignness, and lack of managerial skills. Our result indicates that some of the Chinese firms are running the risk of marginalization if they continue to establish themselves in an overseas market but do not follow and participate in their government’s financial repatriation requirements. Finally, the Chinese firms’ intentions are to learn the organizational process, technology and competencies required to participate in the manufacturing of cars. It is our suggestion that a firm level data related to the Chinese firms’ investment in US should be examined to reach at better result.
Keywords: PFDI, Strategy, China, MNE, U.S.
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