Political strategies of Chinese firms in Germany: an institutionalist perspective

Chinese outward foreign direct investment (OFDI) often causes negative public responses, particularly in western industrialized countries. An important instrument of Chinese multinational corporations (MNCs) to overcome these concerns is the use of political strategies. The paper aims to discuss these issues.

Based on institutionalist theory, the author formulates research hypotheses and tests them with a sample of 611 subsidiaries of Chinese MNCs in Germany.

The study shows that CEO political connection is positively associated with the use of the information and financial incentives strategies, while state ownership influences the use of the financial incentives and reputation-building strategies. Also, moderating effects of subsidiary age on these three political strategies are revealed.

The author derives implications for the literature on corporate political strategies as well as for research on Chinese OFDI, institutional theory and international management theory.