that had inhibited technological development up to that time o In 1950's to be a scientist you had to be recognised by the government before entering R&D centre Not the case anymore Now it is all about research capabilities - “National industry” was redefined to include foreign-invested firms and small private and hybrid start-ups o National planners thereby removed many ideological obstacles to creative organizational approaches. 79
- Relaxation of effort to condition approvals of individual foreign investment projects on specific technology transfer o If you can prove you are the best in your field or that you are crucial to China's technological development Government will give out financial and other supports to assist o Planners actually enabled more rapid technology transfer Bringing the incentives of many different levels of government into alignment Institutional Effort Institutional Effort (continued) - Tax Breaks o A range of amendments to the tax code have been made to make expenditure on R&D virtually costless for the enterprise - Subsidised Credit o A domestic fund to support small and medium high-technology enterprises o Interest subsidies for specific projects by large enterprises - Procurement Preference o Domestic high tech firms are entitled to general preference in government procurement Provision of necessary goods, services of constructions - Corporate Governance o Chinese policy-makers altered many aspects of their corporate governance procedures in order to accommodate venture-capital-assisted start-up businesses 80
Fintech and the Financial System - Fintech o Utilising technology to improve the efficiency of the finance industry o China is the largest fintech market in the world (most unicorns) - Huge increase in IFDI o Foreign firms very interested in investing in this successful Chinese industry - Large insurance market o Most investors prefer to invest in fintech insurance submarket o Potentially the future of the fintech industry - Most consumers familiar with o Money market fund o Bitcoin etc. Lecture #12: Theoretical Frameworks for Emerging Multinational Enterprise’s Early Development of Internationalisation Theories - 1950s - 1960s International trade o Care more about foreign direct investment than just exports o Emphasised competitive advantage At this stage we could only identify big firms internationalisation o Vernon's product lifecycle framework Initially expensive products Then increase manufacturing capability, lower cost of products - 1960s - 1970s o At this stage scholars further emphasised importance of internalisation to internationalisation o Realised that international markets were not perfect Cannot always find producers and suppliers in different parts of the value chain Is more efficient for a single company to carry out these processes themselves Internalisation 81
Related to transaction cost theory Aim is to lower transaction costs o Buckley's internalisation theory - 1980s - 1990s o OLI - Advantage Ownership
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- YI LI
- Government, People's Republic of China, Planned economy