INTERNATIONALIZATION MOTIVES AND RISK ATTITUDES: A COMPARATIVE STUDY OF CHINESE MINING SOES AND NSOES Monica Ren M.Fin. (Victoria University, Australia) B.Bus. (Victoria University, Australia) A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Department of Marketing and Management Macquarie University, Australia 2013 Dedication I wish to dedicate this thesis to my mother, Mrs Liu Xiang, for all her support over the years, for my education and life. I also wish to dedicate this thesis to my son, Jade, who has inspired me to be a mum of whom he is proud. Table of Contents List of Figures ............................................................................... viii List of Tables .................................................................................... x Abstract ......................................................................................... xiii Statement ....................................................................................... xiv Acknowledgments ........................................................................... xv Abbreviations and Acronyms ....................................................... xvii Key Operational Definitions ......................................................... xix Chapter 1: Introduction ................................................................................................. 1 1.1. Research background ............................................................................................. 1 1.2. Research objectives ................................................................................................ 2 1.3. Thesis structure ...................................................................................................... 4 Chapter 2: Chinese OFDI and mining SOEs & NSOEs.............................................. 6 2.1. Introduction ............................................................................................................ 6 2.2. China’s OFDI and Chinese mining industry .......................................................... 6 2.2.1. China’s OFDI trend ......................................................................................... 6 2.2.2. Historical development of Chinese firm internationalization ......................... 9 2.2.3. The significance of the mining sector in China’s OFDI ................................ 11 2.2.4. The historical development of Chinese mining firms ................................... 13 2.3. Chinese mining SOEs and NSOEs ....................................................................... 19 2.3.1. Chinese SOEs’ reform and OFDI .................................................................. 19 2.3.2. Chinese mining SOEs’ OFDI ........................................................................ 21 2.3.3. Hierarchy of Chinese mining SOEs .............................................................. 22 2.3.4. Chinese NSOEs’ reform and OFDI ............................................................... 23 2.3.5. Hierarchy of Chinese NSOEs’ OFDI ............................................................ 25 2.3.6. Chinese mining NSOEs’ OFDI ..................................................................... 26 2.3.7. The institutional environment and firm ownership types in China ............... 27 2.4. Chapter summary ................................................................................................. 32 Chapter 3: EMNEs’ OFDI & Chinese firms’ internationalization .......................... 33 3.1 Introduction ........................................................................................................... 33 iii 3.2. Firm, EMNEs and Chinese firms’ internationalization ........................................ 33 3.2.1. Firm level internationalization studies ........................................................... 33 3.2.2. EMNEs’ internationalization and Chinese firms’ OFDI ............................... 35 3.2.3. The ‘strategy tripod model’ ........................................................................... 37 3.2.4. The ‘strategy tripod model’: Resource-based view ....................................... 38 3.2.5. The ‘strategy tripod model’: Industry-based view ......................................... 45 3.2.6. The ‘strategy tripod model’: Institution-based view ...................................... 47 3.3. Firm OFDI and strategies: Motivation ................................................................. 53 3.3.1. Resource seeking ........................................................................................... 53 3.3.2. Foreign market seeking .................................................................................. 55 3.3.3. Efficiency seeking .......................................................................................... 56 3.3.4. Strategic asset seeking ................................................................................... 57 3.4. Firm OFDI and strategies: Risk attitudes ............................................................. 57 3.4.1. Risk exposed to mining firms ........................................................................ 57 65 3.4.2. CEO/Top manager’s attitudes towards risk attitude ...................................... 65 3.5. Research framework ............................................................................................. 69 3.5.1. Conceptual framework ................................................................................... 69 3.5.2. Research questions ......................................................................................... 70 3.6. Chapter summary .................................................................................................. 74 Chapter 4: Research methodology and data collection ............................................. 75 4.1. Introduction .......................................................................................................... 75 4.2. Research methods and design ............................................................................... 75 4.2.1. Selecting research methods ............................................................................ 75 4.2.2. Adopting qualitative multiple-case-studies method ....................................... 77 4.2.3. Choosing multiple data sources ..................................................................... 78 4.3. Data collection and analysis ................................................................................. 80 4.3.1. Selecting the cases and accessing the firms ................................................... 80 4.3.2. Conducting the pilot study ............................................................................. 82 4.3.3. Conducting the interviews for the case firms ................................................ 85 4.3.4. Processing data analysis ................................................................................. 89 4.4. Chapter summary .................................................................................................. 91 iv Chapter 5: Individual case study firms ....................................................................... 93 5.1. Introduction .......................................................................................................... 93 5.2. Chinese iron and steel industry ............................................................................ 93 5.3. SOE 1: Shougang Holding Co. ............................................................................ 97 5.3.1. Firm overview ............................................................................................... 97 5.3.2. International development ............................................................................. 98 5.3.3. Motivations .................................................................................................. 101 5.3.4. Institutional factors ...................................................................................... 103 5.3.5. Risk attitudes ............................................................................................... 106 5.3.6. Discussion .................................................................................................... 107 5.4. NSOE 1: Shagang Group ................................................................................... 110 5.4.1. Firm overview ............................................................................................. 110 5.4.2. International development ........................................................................... 111 5.4.3. Motivations .................................................................................................. 113 5.4.4. Institutional factors ...................................................................................... 115 5.4.5. Risk attitudes ............................................................................................... 117 5.4.6. Discussion .................................................................................................... 119 5.5. China’s gold industries ....................................................................................... 120 5.6. SOE 2: China National Gold Group Corporation .............................................. 125 5.6.1. Firm overview ............................................................................................. 125 5.6.2. International development ..........................................................................