Collective internationalization – a new take off route for SMEs from China
| DOI | https://doi.org/10.1108/JABS-09-2012-0043 |
| Published date | 20 December 2013 |
| Date | 20 December 2013 |
| Pages | 29-42 |
| Author | Susanne Sandberg,Hans Jansson |
| Subject Matter | Strategy,International business |
Collective internationalization – a new take
off route for SMEs from China
Susanne Sandberg and Hans Jansson
Abstract
Purpose – The purpose of this paper is to investigate the establishments of Chinese wholesale and
retail market platforms in China and Europe, which create a new take-off route for SMEs from China, and
to theorize on this as a new collective route to internationalization.
Design/methodology/approach – An exploratory case study has been undertaken covering four
Chinese market platforms: the role model in Yiwu, China, and the establishments in Warsaw, Poland;
Budapest, Hungary; and Kalmar, Sweden.
Findings – A new collective internationalization route is identified, driven by the collectivistic Chinese
culture. Here Chinese SMEs diverge from traditionally suggested paths of internationalization,taking off
independently from the domestic business network but form a joint market platform in the foreign market.
This collective behavior compensates for the resource constraints of internationally inexperienced
Chinese SMEs. From the market platform, they plug into the local market network and are provided with
economies of scale and scope, ultimately making them internationally competitive. This collective route
offers the potential for joint learning and risk reduction when entering distant markets in the early
internationalization stages.
Research limitations/implications – For Chinese SMEs, co-location in a market platform in foreign
market offers the advantages of lowering institutional distance and uncertainty as the firms collectively
handle these matters. A limitation of the study concerns the generalizability, as few cases are studied.
Still, being an unstudied phenomena there are important empirical contributions to be made.
Originality/value – The paper reports on an overlooked empirical phenomenon, namely the
establishment of Chinese wholesale and retail market platforms in China and Europe. Through this
establishment a new collective route into the global marketby Chinese SMEs is identified and theorized.
Keywords Chinese SMEs, Collective internationalization processes, Market entry modes and nodes,
Market platforms, Motives of internationalization
Paper type Research paper
Introduction
Chinese firms have increasingly entered the world economy, and China has the largest
foreign direct investment (FDI) flows among emerging economies (Deng, 2004). From 2003
to 2008, the Chinese FDI grew 14 times, doubling in size from 2007 to 2008, and even
staying resilient during the financial crisis by growing by 6.5 percent (China Council for the
Promotion of International Trade, 2010). Still, in relation to the size of the economy, the FDI
from China is relatively small and mainly undertaken by larger state owned enterprises
(SOEs) (Morck et al., 2008) and by big national champions such as Haier and Lenovo (Zeng
and Williamson, 2003; Child and Rodrigues, 2005). Monitoring this development, research
on internationalization from China has grown rapidly but is still scarce (Chan, 2000; Keister,
2000; Journal of Small Business and Enterprise Development, 2006; Ge and Ding, 2008).
Also, it has mainly been devoted to the FDI of the larger firms (Child and Rodrigues, 2005;
Buckley et al., 2007; Lou and Tung, 2007). For example, studies are made of such firms as
emerging market latecomers (Yeung, 2000; Child and Rodrigues, 2005; Li, 2007) as well as
DOI 10.1108/JABS-09-2012-0043 VOL. 8 NO. 1 2014, pp. 29-42, QEmerald Group Publishing Limited, ISSN 1558-7894
j
JOURNAL OF ASIA BUSINESS STUDIES
j
PAGE 29
Susanne Sandberg is an
Assistant Professor at
Linnaeus Baltic Business
Research Center, Linnaeus
School of Business and
Economics, Linnaeus
University,Kalmar, Sweden.
Hans Jansson is also based
at Linnaeus Baltic Business
Research Center, Linnaeus
School of Business and
Economics, Linnaeus
University,Kalmar, Sweden.
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