Details
| Original language | English |
|---|---|
| Pages (from-to) | 285-300 |
| Number of pages | 16 |
| Journal | Tijdschrift Voor Economische en Sociale Geografie |
| Volume | 105 |
| Issue number | 3 |
| Early online date | 6 Jun 2014 |
| Publication status | E-pub ahead of print - 6 Jun 2014 |
| Externally published | Yes |
Abstract
The success of foreign direct investment (FDI) from developing countries to developed countries is critically dependent on managing the differences in the knowledge bodies of the regions and players involved. The theories that at least partly explain successful FDI of this kind use the terms cognitive distance and embeddedness. Most of the empirical research takes the perspective of regions and has addressed the problem of becoming embedded in the host regions. This paper takes the firm perspective and examines cognitive distance regarding not only the host region, but also the knowledge of the firms involved. It uses qualitative information from an extensive study of Chinese affiliates in Germany. In contrast to many other studies, this paper shows that a fast and successful process of becoming embedded in the host region can hamper the subsidiary's success, as it may cause conflict with the parent firm.
Keywords
- Chinese outward FDI, Cognitive distance, Germany, Interview, Obstacle, Subsidiary
ASJC Scopus subject areas
- Social Sciences(all)
- Geography, Planning and Development
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
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In: Tijdschrift Voor Economische en Sociale Geografie, Vol. 105, No. 3, 06.06.2014, p. 285-300.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Cognitive distance and obstacles to subsidiary business success-the experience of Chinese companies in Germany
AU - Si, Yuefang
AU - Liefner, Ingo
PY - 2014/6/6
Y1 - 2014/6/6
N2 - The success of foreign direct investment (FDI) from developing countries to developed countries is critically dependent on managing the differences in the knowledge bodies of the regions and players involved. The theories that at least partly explain successful FDI of this kind use the terms cognitive distance and embeddedness. Most of the empirical research takes the perspective of regions and has addressed the problem of becoming embedded in the host regions. This paper takes the firm perspective and examines cognitive distance regarding not only the host region, but also the knowledge of the firms involved. It uses qualitative information from an extensive study of Chinese affiliates in Germany. In contrast to many other studies, this paper shows that a fast and successful process of becoming embedded in the host region can hamper the subsidiary's success, as it may cause conflict with the parent firm.
AB - The success of foreign direct investment (FDI) from developing countries to developed countries is critically dependent on managing the differences in the knowledge bodies of the regions and players involved. The theories that at least partly explain successful FDI of this kind use the terms cognitive distance and embeddedness. Most of the empirical research takes the perspective of regions and has addressed the problem of becoming embedded in the host regions. This paper takes the firm perspective and examines cognitive distance regarding not only the host region, but also the knowledge of the firms involved. It uses qualitative information from an extensive study of Chinese affiliates in Germany. In contrast to many other studies, this paper shows that a fast and successful process of becoming embedded in the host region can hamper the subsidiary's success, as it may cause conflict with the parent firm.
KW - Chinese outward FDI
KW - Cognitive distance
KW - Germany
KW - Interview
KW - Obstacle
KW - Subsidiary
UR - http://www.scopus.com/inward/record.url?scp=84901975089&partnerID=8YFLogxK
U2 - 10.1111/tesg.12064
DO - 10.1111/tesg.12064
M3 - Article
AN - SCOPUS:84901975089
VL - 105
SP - 285
EP - 300
JO - Tijdschrift Voor Economische en Sociale Geografie
JF - Tijdschrift Voor Economische en Sociale Geografie
SN - 0040-747X
IS - 3
ER -