Justin Paul (Full Professor, University of Puerto Rico USA & Distinguished Scholar- Indian Institute of Management) Email: [log in to unmask] , [log in to unmask] )
Ambika Zutshi, (Deakin University, Australia. Email: [log in to unmask] )
Jane Menzies (Senior Lecturer, Deakin University, Australia, Email: [log in to unmask] )
Helen Cai (Middlesex University London, United Kingdom, Email: [log in to unmask] )
- China and India are two old cultures of the world
- China and India are the two most populous emerging markets
- China and India boast numerous innovative firms and business savvy entrepreneurs
- Chinese and Indian firms are actively internationalizing into other markets
- Western multinationals constantly get inspirations through working with China and India
Globalization has steered a transition toward a worldwide economy (Teagarden & Scotter, 2013). Globalization has led to a fast growth in the activities of multinational enterprises (MNEs) and they have responded proactively to globalization by modifying their strategies in developing countries (Narula & Dunning, 2010). In other words, Globalization means integrating the economy and industries with the rest of the world, which involves the removal of restrictions on imports and foreign investment (Paul, 2015). Firms established in developed economies need to explore new emerging markets to expand their operations, to maintain global competitiveness.
Whenever a company ventures abroad, decisions must be made regarding how its business activities in a foreign market should be conducted (Welch, Benito and Peterson, 2007). As part of growth strategy, many firms go global and orient themselves more internationally (Paul & Gupta, 2014). In order to create competitiveness, the evolutionary path of firms from emerging markets could be different from that of firms from developed countries (Kotabe & Kothari, 2016). We need new models and theories to avoid replicated research based on the same model or theory (Terjessen, Hessels &Lee, 2013: Paul, Parthasarathy & Gupta, 2017). Similarly, the area of international management is very much in need of new theories and models (Keupp and Gassman, 2009; Paul & Shrivastava, 2016). For example, Springboard perspective (Luo & Tung, 2007; 2018) has received wide acceptance as a theoretical lens in research these days.
The competitiveness of firms from emerging countries has become an important issue in the academic as well as industry circle, with the globalization gathering momentum. China has been one of the most favorite markets for Western firms for the last decade (Ghauri & Fang, 2001). China and India (CHINDIA) have emerged as the fastest growing economies in the world (Paul & Mas, 2016). According to The Economist, ‘Business in China and India is transforming: Its multinationals will change the way we all live’.1 There is indeed a significant increase in the global impact of those Asian firms: The last twenty years or so have seen an unprecedented expansion of international trade, with the emergence of stronger economies with large populations, such as China and India (Witcher & Chau, 2012).
Considering these developments, the Wall Street Journal has published Asia 200, an annual ranking of Asia's leading companies, as determined by executives and professionals throughout Asia. Their increasing prominence and the growing interest of media and researchers to understand different dimensions of management of firms from China and India, requires a special issue, on the same topic, in this Asian century. In this special issue, we would propose to discuss how Chinese and Indian contexts help us exploring existing theories and their boundaries and create new, indigenous theory/models. We will examine the factors determining the global economic footprint of firms from China and India and the strategies to create sustainable competitive advantage. We intend to encourage scholars to submit papers focusing on either Chinese or Indian business, internationalization as well as comparative studies.
Asia has a great potential as it consists of a total population of about 4 billion people, equally to 60% of the world’s population. To challenge foreign rivals, more Asian firms are engaging in internationalization of their operations (Osawa, 2003; Chang, 2007). For instance, OFDI from China has increased substantially in the recent years (Kolstad & Wiig, 2012). The Special Issue will take stock of what is known about business environment, structure and strategies of firms to succeed in China and India as well and discuss their implications. We aim not only to increase the understanding of those issues, but also to identify the characteristics of firms as well as industries and how it compares with the internationalization of firms from other regions by encouraging the researchers to develop new frameworks and models (such as CELM Framework by Gao, 2003) with research agenda.
Emerging-market firms have played a major role, in the recent decades. The array of such firms going abroad has broadened in the last decade (Aulakh, Kotabe & Teegen, 2000; Kotabe, Jiang & Murray, 2011; Kotabe & Kothari, 2016). In this context, the competitiveness of firms becomes an important issue in the academic field as well as in the industry circle. For example, as late-comers to the global-market scene, Chinese or Indian firms need to overcome several obstacles to their growth and internationalization such as liability of foreignness, scarce firm resources, often unfavorable business conditions at home and negative country-of-origin associations by the customers in developed markets. Therefore, studies exploring new models or theories or focusing on theoretical extension based on recently developed and emerging theories in the context of emerging market firms would be welcomed, following the calls from prior researchers (Rugman and Oh 2012; Paul & Benito, 2018) called for new thinking to formulate business strategy to supplement the conventional focus of the country.
It’s important to understand political, cultural, legal, economic and geographic factors affecting businesses in those countries. Redding and Witt (2006) described the state-owned enterprise system in China as a particular business system and view it as a tray of loose sand. Redding and Witt (2007) explored the choices and chances of Chinese capitalism exploring the role and the future of capitalism. On the other hand, Fang (2012) developed a Yin Yang perspective to understand Chinese culture. Paul (2015) analyzed the impact of World Trade Organization (WTO) in China and India, comparing exports, imports and FDI in those countries and found that China’s achieved success even before joining the WTO and the country is beyond WTO.
With this background, this special issue promises to integrate different aspects that might have influenced the growth strategies, and management of firms from China and India. This is a call for papers examining what is new in Chinese and Indian business.
1.What is new about our understanding of business in China and India? In other words, what do we now view distinctly differently than in the past (e.g., new ways of analyzing, interpreting, and new theories)?
2.What is new about the international business of Chinese and India firms? How have businesses adapted to trends such as globalization, a shrinking domestic workforce, and digitalization?
3.What are the new drivers of success for small, medium and large enterprises in and from China and India in international business?
4.What are the old and new micro and macro factors from the home country that influence the success or failure of multinational enterprises from China and India? What are the similarities and difference of their business models?
5.What institutional constraints and liability of foreignness do for firms from countries such as China and India in their efforts to create global economic footprint?
6. Are the process, path, pace and pattern of firms from China and India different? What are the strategies required for firms from developing countries to create sustainable competitive advantage in the long run?
7. Do national culture and corporate (organizational) culture influence the success or failure of of firms from those markets?
8. What are the old and new foreign market entry and establishment modes of Chinese and Indian firms? How is home country context linked to entry mode choice?
9. Do cultural, administrative, geographic and economic distances matter as far as MNEs from China and India are concerned? Do the internationalization strategies of Chinese firms differ from Indian firms?
10. What differences impact the competitiveness of firms from developed countries while doing business in China or India? Which differences result in firm behavior that impacts the host countries in significant and novel ways?
11. How are the factors influencing the competitiveness of firms? Innovation, technology, strategy? What are their antecedents, and consequences?
12. What are the new and novel paradigms in different areas such as Global outsourcing of services to India, outsourcing/licensing/joint ventures in the manufacturing sector in China?
14. Are there novel /unique models that will help firms and researchers to succeed in those fastest growing markets? If not, how do you fill the gaps by developing innovative framework/model?
15.What are the cultural roots of creativity and innovation in China and India? Similarities and differences?
16- How to understand Chinese and Indian firms’ approaches to innovation in international business?
17- What can we learn from China and India in terms of innovation and entrepreneurship?
The scope of this Special Issue is immense as there are thousands of researchers worldwide actively engaged in research dealing with international business practices, processes and strategies in China and India. The SI would cover several topics, with the focus on (but not limited to)
* The factors which influence the success or failure of firms in and from China and India.
* Similarities and difference of their business models in this competitive era.
* Exports, Imports and Regional trade agreements in the context of CHINA and INDIA.
* Chinese and Indian Industries in the WTO era.
* Institutional constraints and liability of foreignness of firms from as China and India.
* Appropriate strategies required for firms from China and India to create sustainable competitive advantage.
* Role of national culture and corporate (organizational) culture.
* FDI in China and India.
* Foreign market entry and establishment modes of firms from China and India.
* Negotiation Process/Style for foreign firms to succeed in China and India.
* Process of building Networks- guanxi- in those countries.
* Public versus Private sector in China and India.
* Intellectual Property Rights and Implications in China and India
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Chang, J. (2007). International expansion path, speed, product diversification and performance among emerging-market MNEs: evidence from Asia-Pacific multinational companies. Asian Business & Management, 6(4), 331-353.
Fang, T. (2012). Yin Yang: A new perspective on culture. Management and organization Review, 8(1), 25-50.
Gao, M. H. (2013). Culture determines business models: Analyzing home depot's failure case in China for international retailers from a communication perspective. Thunderbird International Business Review, 55(2), 173-191.
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