The Internationalisation of Chinese Born Global Firms

Abstract

Small and medium-sized companies have played and continue to play significant and strategic roles in international trade. In the last few decades, the topic of the Born Global firm has become fashionable as a field of international business research. Born Global firms are, in a central sense, those that internationalise early and rapidly. They are first found in developed economies with domestic markets limited in size and spending power. This type of firm typically enjoys advantages in technology, capacities for innovation and marketing that make them well-placed to offer products and services on international markets with a high degree of competitiveness vis-à-vis rivals. Scholars have, over time, traced the gradual emergence of other Born Global firms in traditional and service industries as well as in developing countries with large domestic markets. However, research on Born Global firms is still at an embryonic stage. The current literature focuses on Born Global firms in developed economies and the phenomenon remains relatively untheorised. This points to two gaps in current research: (1) new theories and frameworks are needed; and (2) research on Born Global firms in developing countries is lacking. Therefore, the first aim of this study is to explore the characteristics of Born Global firms in the largest developing country, China. This second aim of this study is to propose a new comprehensive framework by combining research findings of Chinese Born Global firms and knowledge in the current research literature. Correspondingly, the main research questions in this study are: 1) Why do Chinese SMEs develop into Born Global firms? 2) In what ways do Chinese Born Global firms embark on internationalisation? This study utilises a qualitative multiple-case research method to illustrate in detail the internationalisation of Chinese Born Global firms. To this end, twelve Chinese Born Global firms are sampled from different industries headquartered in five provinces of China. The main data sources are one round of semi-structured interviews and another round of structured interviews with entrepreneurs from the twelve case firms. In addition, secondary data, such as internal, media and industrial reports are also included in the analysis database. With thematic analysis, this study identifies several new research topics. The experience of the founder is the core motivation driving the establishment of Chinese Born Global firms as it impacts most of the other motivations, such as global vision, client base and innovation capacity. Some external factors, such as macro-economic, industry conditions and Chinese “match” culture, also drives Chinese SMEs to become Born Global firms. Meanwhile, collaboration plays a crucial role in both R&D and market strategy during internationalisation. It helps case firms to improve their competitiveness and enhances their chances of survival, which are the two major themes in R&D and market strategy, respectively. Deinternationalisation is a common market strategy among Chinese Born Global firms. With matrix analysis, this study also demonstrates the differences between high-tech Born Global firms and Born Global firms from traditional industries. The industry life-cycle plays a vital role, which mainly affects different international operations between these two types of Born Global firms. Based on further discussion, a comprehensive framework of Born Global firms is put forward to draw out the linkages between the main factors uncovered in different research areas. Combining findings from Chinese Born Global firms, the Uppsala model and the stage model of Born Global firms from the research literature, this study proposes a new internationalisation stage model of Born Global firms. The model presents a repertoire of the various strategies adopted by Born Global firms in different phases of their development. It also suggests a new measurement to define the international success of Born Global firms. To sum up, this study contributes to the knowledge of Chinese Born Global firms in the areas of entrepreneurship, networking, R&D and market strategy. The new analysis framework of Born Global firms provides in-depth explanations of internationalisation. The new internationalisation stage model attempts to define the international success of Born Global firms. Last but not least, it is hoped that the findings of this study will be helpful to current managers of Born Global firms and potential entrepreneurs who might attempt to set up such a firm. The frameworks and the stage model, it is hoped, provide practical guidance to improve their performance and secure their survival in the international market.

Date of Award	2020
Original language	English
Awarding Institution	Aberystwyth University
Supervisor	Ian Harris (Supervisor) & Nicholas Perdikis (Supervisor)