Firm Entry Modes and Chinese Business Networks: Malaysian Investments in Vietnam

• Main Author: Lim, Guanie
• Other Authors: School of Humanities and Social Sciences
• Format: Article
• Language: English
• Published: 2017
• Subjects: Economic globalization; Business networks
• Online Access: https://hdl.handle.net/10356/83107; http://hdl.handle.net/10220/42432
• Institution: Nanyang Technological University

This paper examines the Malaysian Chinese firms that have expanded into Vietnam. Based on research and qualitative personal interviews with Malaysian Chinese firms that have invested in Vietnam, the paper unpacks the entry modes that these firms have undertaken. It argues that the Malaysian Chinese firms prefer joint ventures in their Vietnamese businesses to wholly-owned subsidiaries and personal direct investments. This paper also argues that such investments are often embedded in social and intraethnic ties, which connect Malaysian Chinese firms with Vietnam's ethnic Chinese businessmen. To this end, these firms tend to rely on informal ties and nonmarket institutions in the form of the ethnic Chinese business networks. Nevertheless, the Malaysian Chinese firms are not averse to collaborating with nonethnic Chinese firms that enjoy a good relationship with the Vietnamese state. This observation is especially marked in the property and construction, and finance sectors.