What motivates firms from emerging economies to go internationalization?
Zeng, Ruochen ; Zeng, Saixing ; Xie, Xuemei 等
1. Introduction
With advent of economic globalization, going internationalization
has become one of the most important strategies for many firms to
achieve sustainable growth (Annavarjula, Beldona 2000; De Martino et al.
2006; Filatotchev, Piesse 2009; Grundey 2007; Lehrer et al. 2009;
Miskinis, Reinbold 2010; Sapienza et al. 2006).
Since the implementation of the open policy in 1978, China has
undergone a striking transformation in its economy, aiming at
integration with the global economy (Bilgin et al. 2010; Liu et al.
2005, 2008). China has become a major exporter of manufactured goods in
the world markets (Frost 2004; Buckley et al. 2007). With the increasing
competition among local and foreign companies over the last decade,
Chinese manufacturing firms have to seek expanding foreign markets.
Additionally, many scholars, business experts, and governmental agencies
in China have enthusiastically advised the Chinese manufacturing firms
to go internationalization (Zeng et al. 2009a). Motivation for
internationalization is different for different Chinese manufacturing
firms. Although many studies have explored the internationalization of
firms, there is a paucity of studies focused on the issue from the
emerging economies' perspective (Aulakh et al. 2000; Zeng et al.
2010a). The contribution of this paper is to investigate the factors
that motivate the Chinese firms to go internationalization
multi-dimensionally, including their different scale, ownership and
industrial sectors. It is hoped that this study will be of value and
share the experience in China to improve firms'
internationalization for other emerging economies around the world.
2. Research background
Undoubtedly the manufacturing industry has played an indispensable
role in China. Since 1990s, the export from manufacturing has reached
75% of China's total foreign trade income (UNCTAD 2003). Besides,
lots of foreign investments are clustered around the manufacturing
sectors. According to the statistics published by U.N. Trading
Conference, the total amount of global investment was up to 7.100
billion US dollars between 1980 and 2002, among which China apportioned
448 billion. In 2003, China, being the biggest country in absorbing
foreign investment, attracted more than 60 billion US dollar of foreign
investment (Zeng et al. 2009b).
In this study, a survey to study the motivation factors of going
internationalization was conducted in the Yangtze River Delta region in
China which includes Jiangsu, Zhejiang provinces and Shanghai, forming
the Chinese largest economic zone with high levels of industrial
development. The region, with only 1% China's territory and 6%
population, creates 19.5% of China's GDP and attracts about half of
all foreign investments in China (Zeng et al. 2010a). In 2001, the
production value from manufacturing in the Yangtze River Delta
apportioned up to 95.6% of all industrial production in the region, and
88.2% in China. Moreover, there are many important manufacturing bases
in the region.
At present, the Yangtze River Delta region provides competitive
advantages to labor-intensive industries as well as high-tech or
capital-intensive manufacturing businesses (Zeng et al. 2010b), with
bountiful accumulation of international experience. Hence, the region is
worthy to be studied and the findings may help further complement
existing streams of research.
3. Literature review
Motivations for internationalization of firms have drawn great
interests from practitioners and researchers (Dunning 1977, 1992;
Oviatt, McDougall 2005). Some research works attribute the motivation
for internationalization of firms to realization of related advantages
or resources (Bertolini, Giovannetti 2006; Ruzzier et al. 2006). The
monopolized advantage theory (Hymer 1976) indicated that enterprises
would launch foreign investment on the basis of having monopolized
advantage compared with local companies. According to Dunning (1988),
the internationalization of economic activity was determined by the
realization of three types of advantages, including ownership
advantages, internalization and location advantages (Arranz, De Rroye
2009). In terms of the small-scale technology theory (Wells 1977),
enterprises in developing countries enjoy three kinds of advantages in
internationalization, e.g. small-scale technology, national products and
low-price products. It is recognized that the manufacturing industry in
China adds another advantage: its relatively low labor costs compared
with those of developed countries and other emerging economies (Cheng,
Kwan 2000; Fung et al. 2002; Li 2007). More specifically, a firm may
decide to increase its international activities when this strategic
action is consistent with the resources and capabilities available to
the firm (Barney 1991; Baird et al. 1994; Jack et al. 2008; Bello 2009;
Mockaitis et al. 2007). In addition, it is generally agreed that
internationalization of firms is driven by three factors, including the
explosive growth of low-cost technology connecting people and locations,
the steady dismantling of trade barriers and financial deregulation, and
the widespread economic restructuring and liberalization (Acs et al.
2001; Gjellerup 2000).
Some research works explore the impact of learning-oriented factors
in explaining a firm's motivations for international activities
(Johanson, Mattsson 1993; Ogbuehi, Longfellow 1994; Autio et al. 2000).
As Burpitt and Rondinelli (2000) indicated, firms were more likely to
increase their exporting activities when they valued the amount of
learning which results from international activities. By combining the
learning theory and the new venture theory of internationalization to
study the extent to which small and medium-sized companies would engage
in international activities, De Clercq et al. (2005) suggested that
intensive knowledge renewal and exploitation regarding foreign markets
might increase their willingness of going internationalization in order
to capitalize on the opportunities offered by further international
expansion.
Moreover, some research works point out that internationalization
of firms is motivated by some other factors, such as network positions
and markets (Fletcher 2008; Liuhto, Jumpponen 2003). Based on the
network perspective, Johanson and Mattsson (1993) indicated that the
internationalization strategy of a firm could be influenced by the need
to exploit established network positions. Buckley and Casson (1993)
noted that internationalization of firms was driven by developing their
own international markets.
Although many researchers have examined why firms engage in
international activities (Johanson, Vahlne 1990; Berra et al. 1994;
Calof, Viviers 1995; Crick et al. 2001), most of these studies on
motivation for internationalization have focused on firms in the more
advanced economies (Miskinis, Reinbold 2010). In fact, the motivation
for internationalization of firms in emerging economies may be obviously
different (Liuhto, Jumpponen 2003; Mockaitis et al. 2006; Zhou et al.
2007), which initiates this study.
4. Methodology
4.1. Correspondence analysis
Correspondence analysis (CA) is one of the multivariate statistical
analysis methods developed on the basis of R-type and Q-type Factor
Analysis (Shen et al. 2006). Although Factor Analysis is a standard
technique for describing the relationship between variables in a
low-dimensional space, it hardly analyzes the attributes and
interrelationships of samples. Correspondence analysis can eliminate
complicated mathematical calculations and sub-processes, visually
classifying samples on the factor loading map, and also marking out
major classifying parameters (major factors) and basis, hence providing
a direct, simple, and convenient multivariate statistical method (Shen
et al. 2006). Moreover, it could convert frequency tables into graphical
displays in which rows and columns are depicted as points, and a map of
these points can then be constructed so that the higher proportions
associated with the various levels of rows and columns are close
together on the map (Harcar, Spillan 2006). Although CA is not a
substitute for quantitative study, it adds a fresh dimension to
exploratory and evaluative research and provides a clear picture of
quantitative data results (Whipple 1994). The steps in applying CA are
described in detail below.
Step 1: It assumes that the variable X denotes the n samples and
each sample has an original data matrix with k indicators.
[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (1)
Then, each element will be divided by the sum of all elements T =
[n.summation over (i=1)] [k.summation over (j=1)][x.sub.ik], and the
following matrix is obtained:
p = ([p.sub.ij]) = 1/T([x.sub.ij]) (2)
Step 2: The matrix is transformed and a new matrix is obtained as
shown in equation (3):
Z = ([z.sub.ij]), [z.sub.ij] = [P.sub.ij] -
[p.sub.i*][p.sub.*j]/[square root of [p.sub.i*][p.sub.*j]], [p.sub.i*] =
[k.summation over (j=1)] [p.sub.ij],[p.sub.*j] = [n.summation over
(i=1)][p.sub.ij]. (3)
Step 3: Component matrix of the R-factor is calculated. At first,
the eigenvalue of A = Z'Z is calculated, and [[lambda].sub.1]
[greater than or equal to] [[lambda].sub.2] [greater than or equal to]
... [greater than or equal to] [[lambda].sub.r], 0 [less than or equal
to] r [less than or equal to] min(n,k). Next, the corresponding
eigenvectors [[mu].sub.1], [[mu].sub.2], ..., [[mu].sub.r] are
normalized and the former m eigenvalue and eigenvectors are extracted.
Thus, the component matrix is obtained as shown in equation (4):
F = ([square root of [[lambda].sub.1]][[mu].sub.1], ..., [square
root of [[lambda].sub.m]][[mu].sub.m]. (4)
Step 4: Component matrix of the Q-factor is calculated. At first,
the eigenvectors of B = ZZ' are calculated. Next, the eigenvectors
[v.sub.i] = Z[[mu].sub.i] are normalized and the former m eigenvalue and
eigenvectors are extracted. Then, the component matrix is obtained as
shown in equation (5):
G = ([square root of [[lambda].sub.1]][v.sub.1], ..., [square root
of [[lambda].sub.m]][v.sub.m]). (5)
Step 5: Indicator plots and sample plots are depicted in the plane
axis of factors, of which the matrix F is the coordinates of indicators
plots and matrix G is the coordinates of sample plots.
4.2. Data collection
The data were gathered with the help of a questionnaire survey of
manufacturing enterprises in the Yangtze River Delta region in China. In
this study, 1100 questionnaires were distributed by either mail or
delivered personally. A total of 649 questionnaires were completed and
returned, of which 569 valid questionnaires were used for data analyses.
The characteristics of the responded firms are shown in Table 1.
4.3. The sample
The study is based on the data collected from 569 Chinese
manufacturers, coming from 16 cities of the metropolitan region of
Yangtze River Delta. A summary of the background of the respondents is
shown in Table 1.
All the 569 manufacturing firms fall into five categories of
ownership: 261 firms from private (46%), 130 firms from state-owned
(23%), 95 firms from joint venture (17%), 68 firms from wholly
foreign-owned enterprises (12%), and 15 firms from collective
enterprises (2%).
The size of the responded firms is categorized according to their
total assets, with 11% equal to or less than 10 million RMB yuan, 19%
between 10 and 50 million, about 30% between 50 and 400 million, and
about 40% greater than 400 million.
In the survey, the responding manufacturing firms include 71 firms
(12.5%) producing leather, fur, feathers and apparel, 63 firms (11.1%)
producing communication equipment, computers and other electronic
equipment, 48 firms (8.4%) on electrical machinery and equipment
manufacturing, 40 firms (7.0%) on transportation equipment
manufacturing, 38 firms (6.7%) on chemical fibers, 19 firms (3.3%) on
textiles and garments, shoes and hats.
In this paper, the internationalization process of Chinese
manufacturing firms includes five modes, that is, (1) direct product
exports; (2) integration with foreign-owned enterprises; (3) direct
overseas investments (Arljukova 2008; Cheng, Kwan 2000; Frost 2004;
Miskinis, Reinbold 2010; Ucal et al. 2010); (4) technology transfer to
and cooperation with foreign-owned enterprises (Filatotchev, Piesse
2009; Zeng et al. 2009c); and (5) others. From the responded firms, four
hundred and five firms (71%) claimed that they had only followed a
single internationalization mode in their internationalization process.
5. Results and analysis
5.1. General analysis of motivations for internationalization
According to the survey on motivations for internationalization,
the main motivations are found as follows:
--To explore oversea markets.
--Response to government's promotion.
--To enhance domestic reputation.
--To create global brands.
The results of this survey indicate that 32% enterprises consider
the motivation of internationalization is "to create global
brands", which shows that most of internationalization strategies
of enterprises aim to strengthen the global competition ability by
establishing their own global brands. Thirty percent enterprises going
internationalization are aimed at "exploring oversea markets"
(see Fig. 1).
The percentages of these two motivators add up to 62%, revealing
that enterprises in the Yangtze River Delta region view
"internationalization" as an important strategy for their
long-term development. Twenty-three percent enterprises regard "To
enhance domestic reputation" as their motivation for
internationalization, meaning that these enterprises aim to strengthen
their competencies and domestic reputation through internationalization.
This motivation mainly results from "Admiration Effect". Along
with more and more foreign enterprises entering the Chinese market,
Chinese consumers consider these enterprises bearing international
connection as leaders of the industry (Zeng et al. 2009b). In addition,
only 4% enterprises adopting the internationalization strategy are
motivated by "Response to government's promotion",
showing that the government's support and encouragement are not the
main driving force of internationalization for enterprises in the
Yangtze River Delta region.
5.2. Comparative analysis of motivations for internationalization
of enterprises in different scales
In this study, "Corresponding Analysis" is adopted to
compare the differences in motivations for internationalization of
enterprises under different scales. The results of relations between
motivations for internationalization, grouped under five categories, and
different enterprises scale, divided into four types, are shown in Table
2.
The results of corresponding analysis are shown in Table 3 and
Figure 2.
Table 3 shows that the first two-dimensional eigenvalue accumulates
to 97.7%, indicating that two dimensionalities can explain enough
information of variables. Also Table 3 reveals that the value of
chi-square test of correspondence analysis between enterprise scales and
motivations for internationalization is 29.797 with a significant level
of 0.003, indicating that there is a significant corresponding
correlation between them. As shown in Figure 2, the motivations for
internationalization of enterprises with total assets of more than 400
million RMB yuan, are "to create global brands" and "to
enhance domestic reputation"; the motivation for enterprises with
total assets of less than 10 million or between 10 and 50 million RMB is
"to explore oversea markets"; while the medium-sized
enterprises with assets between 50 and 400 million RMB have a vague
motivation for internationalization, indicating that these enterprises
are in the process of transition, from market pursuit to strategy
purpose. Hence, the results of the analysis reveal that larger-scale
enterprises have much clearer motivations in their internationalization
strategies.
[FIGURE 2 OMITTED]
5.3. Comparative analysis of motivations for internationalization
of enterprises with different forms of ownership
"Corresponding Analysis" is again used to compare the
differences in motivations for internationalization for firms of
different forms of ownership. The results of relations between
motivations for internationalization, grouped under five categories, and
different enterprises ownerships, divided into five types, are presented
in Table 4.
The results of corresponding analysis are shown in Table 5 and
Figure 3.
Table 5 shows all the corresponding indexes of motivations for
internationalization of enterprises of different forms of ownership.
From Table 5, it reveals that the indexes have four dimensionalities,
and the accumulated eigenvalue of the first two dimensionalities is
90.5%, which is not large enough to explain most of the information of
variables. Thus, three dimensions are employed with an accumulated
eigenvalue of 98.8%, which can basically explain most of the information
of variables. Moreover, Table 5 shows that the value of chi-square test
of correspondence analysis between enterprise ownerships and motivations
for internationalization is 43.788 with a level of significance of
0.001, revealing that there is a significant corresponding correlation
between enterprise ownerships and motivations for internationalization.
As shown in Figure 3, Joint Ventures and Private Enterprises have
relatively clearer motivations for internationalization. Joint Ventures
for international operations mainly aim to enhance domestic reputation,
and Private Enterprises mainly aim to explore oversea markets. While
Wholly Foreign-Owned Enterprises have two major motivations for
internationalization, including "To explore oversea markets"
and "To create global brands". The situation is a little
complicated for State-Owned Enterprises. First, these enterprises are
mainly encouraged by the government to launch the internationalization
strategy; second, they are eager to create their global brands; finally,
these enterprises are also partially influenced by the desire of
"exploring oversea markets" and "enhancing domestic
reputation".
[FIGURE 3 OMITTED]
5.4. Comparative analysis of motivation for internationalization of
enterprises in different industrial sectors
To examine the motivations for internationalization of enterprises
in different industrial sectors, the industries are grouped into 21
categories. The results of corresponding analysis are shown in Table 6.
Owing to the dispersion nature of the data, it is relatively
complicated to analyze the motivations for enterprises of different
industrial sectors. The total eigenvalue of the first three
dimensionalities is just 87.3%, which is not large enough to explain
most of the information. Thus, all the four dimensionalities are
employed. The result shows that the four dimensionalities can explain
all the information of variables (see Table 6). From Table 6, it shows
that the value of chi-square test of correspondence analysis between
enterprise ownerships and motivations for internationalization is
102.067, which are significant at a level of 0.05.
A correlation between different industrial sectors and motivations
for internationalization is indicated in Table 7 and Figure 4.
From Table 7 and Figure 4, it reveals that some labor-sensitive
industries such as textile industry, garments and other fiber products
manufactures, aim to explore oversea markets to launch their
internationalization strategy; while the high-tech industries including
electronic and telecommunication equipment manufacturers focus on
creating global brands; raw material manufacture industries, such as
petroleum processing and coking industries, are mainly influenced by the
government for going internationalization; and the chemical industry,
such as raw chemical materials and chemical products, aims to create
global brands or to enhance domestic reputation. Also, the results
indicate that the motivation for internationalization in high-tech
industries is mainly to create global brands. In labor-sensitive
industry, it is mainly to explore oversea markets. In addition, as for
energy industries, their internationalization strategies are mainly
influenced by the government; while some industries' such as
chemical fibre, rubber and instrument manufactures, internationalization
strategy is mainly based on the interest of enhancing domestic
reputation.
[FIGURE 4 OMITTED]
6. Conclusions
Based on the empirical research in the Yangtze River Delta region
in China, the method of Correspondence Analysis was employed to study
the motivations for internationalization of enterprises. The main
findings of this study can be concluded as follows:
1) Different motivations for internationalization of manufacturing
firms in China According to the survey, the motivations of
internationalization for enterprises can be divided into four types:
"To explore oversea markets", "To create international
brand", "To enhance domestic reputation" and
"Response to government's promotion" The strategies of
"To explore oversea markets" and "To create international
brand" are the most common motivators of internationalization for
enterprises while "To enhance domestic reputation" is a
special motivator found in developing countries.
For Chinese enterprises, they consider entering oversea markets
especially those in developed countries as the index of success or a
brand-name. This special motivator of "To enhance domestic
reputation" is one of the main motivators for going
internationalization for Chinese enterprises. However, there are only a
few enterprises which go internationalization under the encouragement of
the government, revealing the fact that it is the enterprises themselves
that initiated the internationalization strategy, but not strongly
influenced by the government, who just provides some related supports
and assistance.
2) Motivations for internationalization of enterprises dependent on
their scale Enterprises in different scales have different motivations
for internationalization. The small ones aim to explore oversea markets
by internationalization; medium ones aim to explore oversea markets, to
create global brands and to enhance domestic reputation; while large
enterprises are mainly motivated by the strategies of "To create
global brands" and "To enhance domestic reputation".
3) Influence of enterprise ownership on motivations for
internationalization Enterprises of different ownership have different
motivations for internationalization. Private Enterprises aim to explore
oversea markets and Joint Ventures prefer to enhance domestic reputation
via internationalization. While Wholly Foreign-Owned Enterprises aim to
both explore oversea markets and create global brands, showing the
diversification of motivations for internationalization. The motivations
of internationalization of State-Owned Enterprises also diversify. Some
aim to create global brands, while some are influenced by the interest
of "To explore oversea markets". They are also influenced by
the government policies.
4) Different industrial sectors with different motivations for
internationalization Enterprises in different industrial sectors have
different motivations for internationalization. High-tech enterprises
mainly aim to create global brands via internationalization.
Labor-sensitive enterprises launch the internationalization strategy in
the pursuit of "To explore oversea markets". Enterprises in
energy industries for internationalization are mainly encouraged by the
government policies. While enterprises in industries such as chemical
fiber, robber, instrument manufactures, mainly aim to enhance domestic
reputation by internationalization.
doi: 10.3846/20294913.2012.677588
Acknowledgements
We would like to thank two anonymous referees for very helpful
suggestions that substantially improved this paper. The authors
gratefully acknowledge the respondents who contributed to this research.
This study is supported by the National Natural Science Foundation of
China (Grant no. 70540001, 71025006) and the Ministry of Education of
China (Grant no. 20090073110029).
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Ruochen Zeng (1), Saixing Zeng (2), Xuemei Xie (3), Chiming Tam
(4), Tianwei Wan (5)
(1) College of Harbor, Coastal and Offshore Engineering, Hohai
University, 1 Xikang Road, Nanjing 210098, P. R. China
(2,5) Antai School of Management, Shanghai Jiaotong University, 535
Fahuazhen Road, Shanghai 200052, P. R. China
(3) School of Management, Shanghai University, 99 Shangda Road,
Shanghai 200444, P. R. China
(4) College of Science and Engineering, City University of Hong
Kong, 83 Tat Chee Avenue, Hong Kong
E-mails: (1) rczeng@sina.com; (2) zengsaixing@sjtu.edu.cn
(corresponding author); (3) xxml030@126.com; (4) bctam@cityu.edu.hk; (5)
wantw@sjtu.edu.cn
Received 07 September 2010; accepted 27 July 2011
Ruochen ZENG. Undergraduate student at Hohai University and
Research Assistant at Shanghai Jiaotong University. Mr. Zeng is involved
in a research project on sustainable competitiveness based innovation
for Chinese enterprises from National Natural Science Foundation of
China. Research interest: innovation management.
Saixing ZENG. Doctor, Professor and Head in Antai School of
Management at Shanghai Jiaotong University, China. As a researcher in
technology management and related fields, he has managed a large number
of research projects, and has published more than 120 journal and
conference papers, books, and reports on technology management. Research
interest: technology management.
Xuemei XIE. Doctor, Lecturer in School of Management at Shanghai
University, China. Dr Xie completed her Ph.D. study at Shanghai Jiaotong
University in 2009. She worked as Research Associate at City University
of Hong Kong in 2007 and in 2009. Dr Xie has published 20 scientific
articles. Research interest: technology management.
Chiming TAM. Doctor, Professor in College of Science &
Engineering at City University of Hong Kong. Professor Tam obtained a
Ph.D. in Loughborough University, UK in 1993. He has been as leaders of
several teaching programs and successfully supervised a number of PhD
and MSc students. Professor Tam has published more than 150
international refereed journal papers. Research interest: project
management.
Tianwei WAN. Doctor, Research Fellow in the Antai School of
Economics & Management, Shanghai Jiaotong University, China. He
gained his Ph.D. degree in management from the same university. His
research area focuses on FDI spillover and firm's
internationalization. Dr Wan has published more than 10 articles.
Research interest: firm's internationalization.
Table 1. Characteristics of
the responded firms
Classification /
Number of
enterprisers
City
Shanghai 181
Nanjing 16
Suzhou 24
Wuxi 32
Changzhou 24
Nantong 33
Taizhou 28
Yangzhou 20
Zhenjiang 23
Hangzhou 25
Huzhou 23
Jiaxing 28
Ningbo 34
Shaoxing 34
Taizhou 22
Zhoushan 5
Others 17
Total 569
Classification /
Number of
enterprisers
Ownership
WFOEs 68
JVs 95
SOEs 130
PEs 261
CREs 15
Total 569
Number of
employees
>2000 157
301-2000 203
50-300 172
<50 37
Total 569
Total assets
(Million Yuan)
>400 229
50-400 170
10-50 107
<10 63
Total 569
Classification/Number of enterprisers
Industry
Food Processing, Food Manufacturing 19
Textile Industry, Garments and Other Fiber 71
Products
Leather, Furs, Down and Related Products 12
Timber Processing, Bamboo and Straw Products 7
Furniture Manufacturing 7
Papermaking and Paper Products 14
Printing and Record Medium Reproduction 7
Cultural, Educational and Sports Goods 7
Petroleum Processing and Coking 10
Raw Chemical Materials and Chemical Products 32
Medical and Pharmaceutical Products 38
Chemical Fiber 16
Rubber Products, Plastic Products 16
Nonmetal Mineral Products, Metal Products 7
Smelting and Pressing of Ferrous Metals and 14
Nonferrous Metals
Ordinary Machinery, Special Purpose Equipment 51
Transport Equipment 40
Electric Equipment and Machinery 48
Electronic and Telecommunications Equipment 63
Instruments, Meters, Cultural and 17
Office Machinery
Crafts and other industries 18
Others 55
Total 569
Table 2. Correspondence table of different enterprises scale
and motivations for internationalization
Enterprises Motivations for internationalization
scale
To explore Response to To enhance
oversea government's domestic
markets promotion reputation
<10 million 19 4 12
10-50 million 34 5 17
50-400 million 53 4 40
>400 million 59 8 61
Active Margin 165 21 130
Enterprises Motivations for internationalization
scale
To create Others Active
global Margin
brands
<10 million 7 7 49
10-50 million 19 11 86
50-400 million 55 23 175
>400 million 100 18 246
Active Margin 181 59 556
Table 3. Chi-squared analysis and dimension inertia
Dimension Inertia Proportion
of Inertia
Accounted
for
Accumulated
1 0.047 0.868 0.868
2 0.006 0.109 0.977
3 0.001 0.023 1.000
Chi-square test: 29.797;
P-value = 0.003
Dimension Variable Score in Inertia
Dimension
1 2
1 Motivations for
internationalization
2 To explore oversea -0.433 -0.029 0.012
markets
3 Response to -0.763 1.120 0.008
government's
promotion
Chi-square To enhance domestic 0.107 0.092 0.001
test: reputation
29.797;
P-value = To create global 0.574 -0.006 0.023
0.003 brands
Others -0.514 -0.503 0.008
Enterprises scale
<10 million -0.906 0.395 0.017
10-50 million -0.618 0.083 0.014
50-400 million -0.052 -0.393 0.004
>400 million 0.434 0.172 0.019
Dimension Variable Dimension to
Inertia of
Point
1 2 Total
1 Motivations for
internationalization
2 To explore oversea 0.969 0.002 0.970
markets
3 Response to 0.567 0.433 0.999
government's
promotion
Chi-square To enhance domestic 0.632 0.314 0.946
test: reputation
29.797;
P-value = To create global 0.995 0.000 0.995
0.003 brands
Others 0.733 0.249 0.982
Enterprises scale
<10 million 0.910 0.061 0.972
10-50 million 0.943 0.006 0.949
50-400 million 0.047 0.939 0.986
>400 million 0.947 0.053 1.000
Table 4. Correspondence table of different enterprises
ownerships and motivations for internationalization
Ownership Motivations for internationalization
To explore Response to To enhance
oversea government's domestic
markets promotion reputation
WFOEs 26 1 10
JVs 23 0 28
SOEs 34 12 32
PEs 75 5 57
CREs 7 3 3
Active Margin 165 21 130
Ownership Motivations for
internationalization
To create Others Active
global Margin
brands
WFOEs 24 9 70
JVs 33 9 93
SOEs 49 11 138
PEs 74 30 241
CREs 1 0 14
Active Margin 181 59 556
Table 5. Chi-squared analysis and dimension inertia
Dimension Inertia Proportion
of Inertia
Accounted
for
Cumulative
1 0.055 0.694 0.694
2 0.017 0.211 0.905
3 0.006 0.082 0.988
4 0.001 0.012 1
Chi-square test: 43.788
P-value = 0.000
Dimension Variable Score in Dimension
1 2 3
1 Motivations for
internationalization
2 To explore oversea -0.069 0.484 -0.108
markets
3 Response to -2.327 -0.170 0.214
government's
promotion
4 To enhance domestic 0.062 -0.379 -0.412
reputation
To create global 0.148 -0.232 0.317
brands
Chi-square Others 0.430 0.256 0.160
test:
43.788
P-value = Ownerships
0.000
WFOEs 0.240 0.593 0.416
JVs 0.410 -0.405 -0.282
SOEs -0.505 -0.354 0.273
PEs 0.188 0.139 -0.115
CREs -2.180 0.835 -0.917
Dimension Variable Inertia Dimension to
Inertia of Point
1 2
1 Motivations for
internationalization
2 To explore oversea 0.010 0.034 0.925
markets
3 Response to 0.048 0.993 0.003
government's
promotion
4 To enhance domestic 0.008 0.027 0.560
reputation
To create global 0.007 0.250 0.340
brands
Chi-square Others 0.006 0.716 0.140
test:
43.788
P-value = Ownerships
0.000
WFOEs 0.009 0.181 0.608
JVs 0.012 0.571 0.308
SOEs 0.020 0.729 0.198
PEs 0.005 0.654 0.196
CREs 0.032 0.874 0.071
Dimension Variable Dimension to
Inertia of Point
3 Total
1 Motivations for
internationalization
2 To explore oversea 0.029 0.988
markets
3 Response to 0.003 0.999
government's
promotion
4 To enhance domestic 0.412 0.999
reputation
To create global 0.396 0.985
brands
Chi-square Others 0.034 0.890
test:
43.788
P-value = Ownerships
0.000
WFOEs 0.187 0.976
JVs 0.093 0.972
SOEs 0.073 1.000
PEs 0.084 0.935
CREs 0.053 0.998
Table 6. Chi-squared analysis and dimension inertia
Dimension Inertia Proportion
of Inertia
Accounted
for
Cumulative
1 0.076 0.381 0.381
2 0.055 0.275 0.656
3 0.043 0.216 0.873
4 0.025 0.127 1.000
Chi-square test: 102.067
P-value = 0.049
Dimension Variable Score in Dimension
1 2 3 4
1 Motivations for
internationalization
2 To explore -0.094 0.560 0.435 0.078
oversea markets
3 Response to -1.562 -1.211 0.940 -1.244
government's
promotion
4 To enhance 0.014 -0.575 0.055 0.530
domestic reputation
Chi-square To create 0.538 -0.073 -0.225 -0.344
test: global brands
102.067
P-value = -0.988 0.328 -1.021 0.037
0.049
Dimension Variable Inertia Dimension to Inertia
of Point
1 2 3
1 Motivations for
internationalization
2 To explore 0.035 0.021 0.632 0.339
oversea markets
3 Response to 0.048 0.465 0.238 0.127
government's
promotion
4 To enhance 0.029 0.000 0.630 0.005
domestic reputation
Chi-square To create 0.036 0.722 0.011 0.096
test: global brands
102.067
P-value = 0.051 0.527 0.049 0.424
0.049
Dimension Variable Dimension to
Inertia of Point
4 Total
1 Motivations for
internationalization
2 To explore 0.008 1.000
oversea markets
3 Response to 0.170 1.000
government's
promotion
4 To enhance 0.364 1.000
domestic reputation
Chi-square To create 0.171 1.000
test: global brands
102.067
P-value = 0.000 1.000
0.049
Table 7. Correspondence table of different industries and motivations
for internationalization
Motivations for
internationalization Industries
To explore I02 Textile Industry, I04 Timber
oversea Garments and Processing,
markets Fiber Products Bamboo and
and Paper Straw Products
I11 Medical and
Pharmaceutical
Products Products
I15 Smelting and I16 Ordinary
Pressing Machinery, Special
of Ferrous Metals Purpose Equipment
I21 Crafts and other
industries
To enhance I07 Printing and I13 Rubber Products
domestic Record Medium and Plastic
reputation Reproduction Products
I12 Chemical Fiber I20 Instruments,
Cultural and Office
I14 Nonmetal Mineral Machinery
Products,
Metal Products
To create I01 Food Processing, I18 Electric
global brands Food Equipment and
Manufacturing Machinery
I17 Transport
Equipment
I10 Raw Chemical I19 Electronic and
Materials and Telecommunications
Products Equipment
I08 Cultural,
Educational and
Sports Goods
Response to I09 Petroleum
government's Processing and
promotion Coking
Others I03 Leather, Furs, I05 Furniture
Down and Manufacturing
Related Products
Fig. 1. Enterprises could choose more than
one motivation in this survey
To explore oversea markets 30%
Response to government's promotion 4%
To enhance domestic reputation 23%
Others 11%
To created global brands 32%
Note: Table made from pie chart.
