Xavier Richet

Geely: a trajectory of catching up and asset–seeking multinational growth

China became the largest world automobile market in 2009, following a decade of rapid growth. Foreign carmakers played a central role in bringing in technology, management know-how and marketing capabilities, as well as in building supply chains; while domestic companies, mainly central or local state-owned, established joint ventures with foreign carmakers, which took the lions share of the Chinese market. However, in the late 1990s, some domestic private companies accessed to this market and experienced rapid growth. In order to discuss the catching up and internationalisation processes of Chinese carmakers, and in particular the crucial relationship between the two processes, this paper focuses on the case study of Geely, which broke both industrial and institutional barriers to access this industry. It experienced various ways of catching up, including technology imitation via reverse engineering, product architecture innovation, and asset seeking acquisitions abroad; as well as various ways of international growth, including export, assembly abroad, market seeking operations, and (again) asset-seeking acquisitions abroad. This case study helps the understanding of catching up of Chinese firms, while offering insights into the competitive strategy of emerging multinationals. This paper explores jointly the trajectories of catching up and of multinational growth.

Attractivity of the FDI in Western Balkans: Evidence from the Central and Eastern European Countries (CEEC)

One lesson of the transformation of CEECs during the 1990s and early 2000s has been that FDI was not initially considered as a tool for boosting economic transformations in the region. Today most of these economies rely on the accumulated stocks and the annual flows of capital to develop their specializations, deepen their economic transformation and linking their economies to the most advanced economies of the EU. There has not been clear vision of the role of FDI at the beginning of the transformation. Poland and the Czech Republic, for instance, have set up policies of transformation, notably privatizations, to avoid the presence of foreign investors. Privatizations in Hungary has been a blessing in disguise (see P. Mihaly): selling assets to foreign investors has speed up the adjustment, transforming whole regions of the country, (Western Hungary, Budapest) into a new industrial network welcoming investment in sectors with strong added value. In other countries, achieving the systemic transformation, matching the objectives set up by the EU to become future members, (even for late comers like Slovakia) have paved the way to create a strong attractivity to FDI which account, in many ways (rate of investment, share in the GDP, share in value added, in exports, etc.) in the economic performance of these economies (see G. Hunya). To sum up, attractivity can be explained by different factors such as former specialization of those economies (see S. Radosevic), proximity, fragmentation and outsourcing of some functions of big corporations (Renault in Romania), macro policies, increasing local demand, etc.Concerning Western Balkan economies we will elaborate two questions: • Do capital flows continue to poor in the region in direction of the “late comers” which have delayed their economic adjustment? • What kind of competitive advantage can be build up in the region in order to follow what has been done in CEECs?

The Internationalisation of Chinese Firms: Growth, Motivations and Strategies

Globalisation has led to a new phenomenon which attracts the attention of scholars, namely the internationalisation of firms from emerging countries such as China. These firms are still limited in number and the volume of capital invested. But they are entering different markets in the North and the South, in search for production factors (material resources, technology and human capital), as well as sales outlets. The accumulation of financial resources, along with technical and managerial know-how through industrial cooperation with foreign companies operating in these emerging countries and the spin-offs this creates, all favour the investment in greenfield sites, as well as the acquisition abroad of assets that are sometimes prestigious (see for example the purchase of Volvo by the Chinese car producer Geely).