What is strategic-asset-seeking and does it help explain why Chinese Essay

What is strategical- plus-seeking and does it help explain why Chinese business groups internationalise their operations - Essay ExampleIn addition to increasing foreign result commitment (FDI) inflows, Chinas outward FDI investments have been increasing at a phenomenal rate and drawing the attention of scholars and queryers (Fung & Garcia-Herrero). In attempting to understand and forestall location choices of FDI outflows, researchers use a number of hypotheses including asset-seeking explanations (Makino, Lau, & Yeh). In this research study, trends in Chinas FDI outflows are examined and analysed with a view to determining whether or not strategic asset-seeking provides a satisfactory explanation for Chinas FDI outflows. This paper is therefore divided into three main parts. The first part of this paper defines asset seeking. The second part of this paper explores and discusses trends in Chinas FDI outflows. Some examples of Chinese firms internationalisation will be highlight ed in the second part of this paper. The lowest part of this paper analyses whether or not strategic asset-seeking provides a satisfactory explanation of Chinas FDI outflows or internationalising trends. In order to test the surmisal that strategic asset seeking explains Chinas trends toward internationalization, references will be made to examples of Chinese companies that have become internationalized. ... 72). One of the ways in which strategic asset seeking organizations attempt to invest abroad as a means of gaining or maintaining a competitive edge is to invest in research and development or in design facilities (Buckley, et. al., p. 114). As Buckley, et. al. explain, these kinds of investments are intended to put the organization in a position to access current know-how and to be able to take part in the production of new products and to set standards for maximizing the organizations competitive edge. According to Buckley, et. al. The investor normally intends to benefit fr om spillover cause deriving from agglomerations of similar minded companies and from complementary industries in the host country (p. 114). In addition, strategic asset-seeking behaviour of organizations usually takes place when there are improvements in popular brands, the national supply chain and in management and expertise talent via directly purchasing or from proximity of operations (Buckley, et. al., p. 144). In the latter(prenominal) scenario, the organization gains from operational proximity via the spillover effects and/or demonstration effects (Buckley, et. al., p. 114). According to Dunnings eclectic paradigm suggest that firms will usually invest abroad to gain an advantage that is not usually available at home. These advantages can include the acquisition of knowledge, expertise, and distribution channels (Dunning). According to Dunning and Lundan, strategic asset seeking is not about exploiting conditions abroad, although it may be an important and complimentary moti ve. However, the impetus for asset-seeking behaviour is the acquisition of an organizations global portfolio of physical assets and tender