Internationalization and Network Strategies: Taiwanese Firms’ Foreign Direct Investment in China and the USA

Abstract

By applying a network theory, this study explores the relationships between internationalization models and the adoption of network strategies. Based on the time period between a firm’s inception and its first year of investing abroad, this study compares firms with two different types of internationalization process: “Born Global” and “Incremental”. This study also proposes two kinds of network strategies: business and social. After investigating 138 foreign direct investment (FDI) cases of Taiwanese firms in China or the USA, we find that compared to Incrementals, Born Globals are more likely to adopt social network strategies with the local community. This research also finds there is a strong relationship between the foreign investment country and network strategies. Compared to firms with FDI in the USA, firms investing in China rely more on co‐operative production systems and are more likely to utilize social relationships with the local community and government authorities.

Citation

Tseng, C. and Kuo, H. (2008), "Internationalization and Network Strategies: Taiwanese Firms’ Foreign Direct Investment in China and the USA", Journal of Asia Business Studies, Vol. 3 No. 1, pp. 23-32. https://doi.org/10.1108/15587890880000488