This paper aims to re-examine the role of institutions in the rise of made-in-China
multinationals. Specifically, the paper seeks to understand how changes in the global environment,
especially global financial crisis, have solidified the Chinese government’s role in pushing and
encouraging Chinese firms to engage in outbound foreign direct investment (OFDI) activities.
Design/methodology/approach – This is a conceptual paper. The analysis is based on a large
number of publicly available sources, including research papers, government documents, and reports.
The paper strives to triangulate the validity of the data with multiple sources.
Findings – The study finds that while the role of the state in China has been evolving since
the start of the economic reforms in 1978, by no means has it been lessened. Instead, the state has
asserted its role specifically to grow Chinese multinationals in size and in number, by leveraging the
financial resources accumulated over the last 30 years, by taking advantage of the cheap assets made
available globally by the recent financial crisis and by institutionalizing its “Go Global” strategy.
Research limitations/implications – The study implies that the role of the state will be further
solidified through China’s national goal of enhancing competitiveness via knowledge acquisition through
OFDI and simultaneously, multinationals’ OFDI initiatives and strategies will be reinforced by the state’s
economic policies and goals while their commercial interests will take on an increasing importance in the
global marketplace and their behavior will co-evolve with and be reshaped by local, national, and
international environments. The paper suggests that future studies employ co-evolutionary theory to
investigate the role of state-owned enterprises (especially the functions of their CEOs) as well as non-
state actors in shaping the institutional framework in China. Future studies should verify some of the
ideas with empirical data and strive to triangulate different data sources to increase data quality.
Practical implications – The study also provides implications to Chinese policy makers on how to
balance the government’s role as conductor, enabler, protector, and constrainer while allowing Chinese
multinationals to integrate into the global market for the benefit of both China and the world economy.
Originality/value – This study represents an original contribution to this topic. The research
contributes to the study of globalization of Chinese enterprises by exploring the renewed dynamic
relationship between the state and the firm after the 2008 global financial crisis.
Keywords Institutional theory, Financial crises, Globalization, Chinese multinational firms,
Coevolution, Foreign direct investment (FDI)
Paper type Conceptual paper
University of San Francisco, San Francisco, California, USA, and
Clyde D. Stoltenberg
Wichita State University, Wichita, Kansas, USA