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The role of absorptive capacity in EMNEs’ Strategic asset-seeking internationalization:A case study of four Chinese MNEs
[Thesis]. Manchester, UK: The University of Manchester; 2012.
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Abstract
Many studies have highlighted that EMNEs are utilizing strategic asset-seeking (SAS) internationalization as a means to upgrade their capabilities and build up their competitive advantages (Lecraw, 1993; Makino et al., 2002; Child and Rodrigues, 2005). However, no research has specifically examined or directly studied how a firm’s internal capability, with the particular focus on absorptive capacity, influences the outcome of EMNEs’ SAS international activities. The overall aim of this research is to explore how absorptive capacity of EMNEs influences the outcome of their SAS internationalization, specifically focusing on two key dimensions of absorptive capacity, i.e. the ability to identify external assets, and the ability to acquire external assets. Given the exploratory nature of this research, a qualitative multiple case study method was adopted. Altogether, four Chinese MNEs were selected with a total of 10 SAS events conducted by them respectively.We clearly demonstrated the linkages between firms’ absorptive capacity and SAS outcomes. We found that the outcome of case companies’ SAS events were not effective in terms of gaining substantial assets, rather case companies can gain reputation and other benefits through the events. We found a new element comprising absorptive capacity, i.e. the ability to retain the acquired assets. We argued that it is a precondition for assimilation to happen. We demonstrated how firms’ absorptive capacity in the dimensions of identification, acquisition and the new emerged dimension, i.e. retention ability, together influenced their SAS outcomes. We also explored the underpinning factors for each dimension of absorptive capacity. An integrated model was developed. Our study is the first to specifically explore the linkage between absorptive capacity and EMNEs’ SAS internationalization. We made several contributions to international business literature on SAS events and literature on absorptive capacity respectively. Specifically, we attempted to gain understanding of why EMNEs’ SAS strategies may or may not be fully effective, to enhance our understanding of absorptive capacity issues in emerging country contexts, and to achieve potential conceptual enrichment.