The Internationalisation of Mainland Chinese Firms into Malaysia: From Obligated Embeddedness to Active Embeddedness

• Main Author: Lim, Guanie
• Other Authors: School of Humanities and Social Sciences
• Format: Article
• Language: English
• Published: 2017
• Subjects: Malaysia; China
• Online Access: https://hdl.handle.net/10356/83108; http://hdl.handle.net/10220/42431; https://journals.sub.uni-hamburg.de/giga/jsaa/article/view/776
• Institution: Nanyang Technological University

This paper examines the rationale by which mainland Chinese firms choose their coalition partners in their Malaysian ventures. I explore how, under certain political economic conditions, such cross-border investment and corporate tie-ups can be shaped to meet the Malaysian state’s objectives. I argue that the Malaysian state has enjoyed success in the construction sector by nurturing cooperation between its carefully groomed government-linked companies and mainland Chinese firms. Government-linked companies are useful coalition partners for the mainland Chinese firms because of the crucial role the state plays in creating a largely non-competitive industry that favours government-linked companies. Outside of the construction sector, however, the state has enjoyed markedly less success in fostering cooperation between the mainland Chinese firms and the government-linked companies. Consequently, the mainland Chinese firms possess more bargaining power vis-à-vis the state when they invest in these sectors, enjoying considerable autonomy in the selection of their coalition partners.