Chinese Multinational Enterprises in Germany: Institutional Distance, Local Networks and Knowledge Exchange

The department of Geograpy at the Leibniz University Hannover, the Department of Geography at the Justus-Liebig-University Giessen and the Department of Geography at the Ernst-Moritz-Arndt-University Greifswald are jointly conducting a research project funded by the German Research Foundation. Topic of this project is the acquisition of German industrial companies by Chinese investors.

This research project has the following contextual background:

• Since the implementation of the Going Out Strategy, foreign direct investments by Chinese enterprises to Germany have strongly increased. A frequent, but little researched form of market entry in this connection is the acquisition of industrial companies via mergers and acquisitions (M&As).
• Scholarly literature has assumed access to know-how and management knowledge (e.g. product development, trademark rights) as well as its transfer to be an essential motive for M&As. However, there is no systematic research yet on which internal company processes are adopted to reach this goal.
• There are large differences between China and Germany concerning their regulatory, cultural and management systems (institutional distance), which can influence the business operations of the acquired firms. There is little research on Chinese M&As, taking an institutional perspective yet.
• The implications of Chinese M&As in Germany for stakeholders (e.g. suppliers, customers, organizations) and the regional economy have so far been scarcely researched.

The aim of the project is to research

1. the organization of internal knowledge transfer processes,
2. the handling of institutional distance, and
3. the impact of M&As on stakeholders along the value chains and the regional economy.

Thus, a contribution to the scholarly and public debate on the perspectives of Chinese M&As in Germany shall be made. During the first survey phase, intermediaries (banks, economic development agencies, consultants, lawyers, Chinese associations) were interviewed.

Now, the focus is on German companies, which were acquired by Chinese multinational corporations. The aim is to conduct interviews with managers and executives of both nationalities. One topic during these interviews will be the experiences in dealing with institutional distances. Furthermore, it is of interest how intended knowledge transfers are organized. Additionally, the reactions of suppliers and customers and the regional stakeholders to the M&A will be a content of the interview.

All statements will be treated confidentially and identifying statements will be anonymized. The evaluation of the interviews is only for scientific purposes. Personal information will not be forwarded to third parties and all project staff is obliged to observe the Rules of Good Scientific Practice.

The projects duration is two years (October 2015-October 2017). Using the research findings, important practice-oriented implications for intermediaries, managers and policy makers will be derived. The results will be made available to survey participants during a one-day conference in 2017, and in form of a summary of the research findings.

Publications:

• Liefner, I.; Si, Y.-F.; Schäfer, K. (2019): A latecomer firm's R&D collaboration with advanced country universities and research institutes: The case of Huawei in Germany. Technovation 86-87, 3-14.
• Haasis, T. I.; Liefner, I. (2019): Reviewing the research on the internationalization of Chinese firms: Thematic expansion, new impulses and potential future development. International Journal of Emerging Markets 14(1), 24-50.

Presentations to Scientific Audiences:

• Haasis, T.; Liefner, I.: Chinese cross-border acquisitions in developed economies: The impact on the business-to-business customer and supplier relationships of the acquired enterprise. Sino-German Research Network of Management Sciences Conference, Bayreuth, 19.-22.3.2018.
• Haasis, T.; Liefner, I.: Knowledge Transfer in Chinese Cross-Border Acquisitions in Developed Economies: An Organizational Learning Perspective. Kristiansand, 11. China Goes Global Conference, 17. Juni 2017.
• Schiller, D.; Liefner, I.: Multinational Unternehmen aus China in Deutschland: Institutionelle Nähe, lokale Vernetzung und Wissensaustausch. Frankfurt, HOLM, 30. Juni 2017.
• Haasis, T.; Liefner, I.: Reviewing the research on internationalization of Chinese firms: Thematic evolution and new impulses. Kopenhagen, 5th Copenhagen Conference on ’Emerging Multinationals’: Outward Investment from Emerging Economies, 27. Oktober 2016.