TOP 1%
6. Discussion and conclusions
6.2 Management implications
The new generation of ICT technology has become one of the fiercest areas of technological competition among countries around the world. In the current global
investment environment, it is necessary to reconsider whether cross-border M&As are the best way for Chinese ICT enterprises to enhance their core competitiveness.
Our findings have important practical implications for cross-border M&As of Chi- nese ICT firms. At the firm level, enterprises should rationally implement cross- border M&As. Cross-border M&As have not improved the non-location-bound competitive advantage of Chinese ICT firms currently. After cross-border M&As, the development of enterprises depends more on the rapid growth of the home market scale than on improving internal technical efficiency. Enterprises may invest more resources in developing the domestic market to obtain short-term benefits rather than long-term strategic goals such as technology research and development [28]. Improvements in the home-country-bound and non-location- bound competitive advantages cannot be achieved automatically, and the
heterogeneity between enterprises will lead to differences in M&As. Therefore, enterprises should not blindly follow the trend but combine their own conditions and actively‘go out’while accumulating international experience, laying the foun- dation for a leap forward to advanced internationalisation. At the government level, even though state ownership can secure financial resources for enterprises, govern- ment intervention may have a negative impact on corporate FDI. Home govern- ments can encourage firms to‘go out’by providing market and online information, rather than excessive institutional and financial support. Governments should also strengthen the supervision model of FDI, and encourage enterprises with the ability and international experience to conduct foreign investment. Governments should caution those enterprises that do not satisfy the conditions needed to invest over- seas and to conduct the‘arbitrage-type’M&As that rely on the resources, markets, and institutional advantages of their home country to tread carefully.
Author details
Yan Chen1, Fei Li1, Jaime Ortiz2* and Wenbo Guo1
1 School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing, P.R. China
2 University of Houston, Houston, Texas, United States
*Address all correspondence to: [email protected]
© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/
by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
References
[1]Wang L, Schweizer L, Michaelis B.
Experiential learning for Chinese companies to complete cross-border acquisitions: The case of Chinese acquirers. International Journal of Emerging Markets. 2020. DOI: 10.1108/
IJOEM-12-2018-0663
[2]Bertrand O, Capron L. Productivity enhancement at home via cross-border acquisitions: The roles of learning and contemporaneous domestic
investments. Strategic Management Journal. 2015;36(5):640-658
[3]Buckley P. China goes global:
Provenance, projection, performance and policy. International Journal of Emerging Markets. 2019;14(1):6-23 [4]Luo Y, Tung RL. International expansion of emerging market
enterprises: A springboard perspective.
Journal of International Business Studies. 2007;38(4):481-498
[5]Sun SL, Lee RP. Enhancing innovation through international joint venture portfolios: From the emerging firm perspective. Journal of International Marketing. 2013;21(3):1-21
[6]Varma S. Born global acquirers from Indian IT: An exploratory case study.
International Journal of Emerging Markets. 2011;6(4):351-368
[7]Iurkov V, Benito GR. Domestic alliance networks and regional strategies of MNEs: A structural embeddedness perspective. Journal of International Business Studies. 2018;49(8):1033-1059 [8]Deng P, Delios A, Peng MW. A geographic relational perspective on the internationalization of emerging market firms. Journal of International Business Studies. 2020;51(1):50-71
[9]Hennart JF. Digitalized service multinationals and international
business theory. Journal of International Business Studies. 2019;50(8):1388-1400 [10]Hennart JF. Emerging market multinationals and the theory of the multinational enterprise. Global Strategy Journal. 2012;2(3):168-187 [11]Papanastassiou M, Pearce R, Zanfei A. Changing perspectives on the
internationalization of R&D and
innovation by multinational enterprises:
A review of the literature. Journal of International Business Studies. 2019;51: 623-664
[12]Li J, Fleury MTL. Overcoming the liability of outsidership for emerging market MNEs: A capability-building perspective. Journal of International Business Studies. 2020;51(1):23-37 [13]Ramamurti R. What is really different about emerging market
multinationals? Global Strategy Journal.
2012;2(1):41-47
[14]Ramamurti R, Hillemann J. What is
“Chinese”about Chinese
multinationals? Journal of International Business Studies. 2018;49(1):34-48 [15]Rugman AM, Oh CH, Lim DS. The regional and global competitiveness of multinational firms. Journal of the Academy of Marketing Science. 2012;40 (2):218-235
[16]Rugman AM, Nguyen QT, Wei Z.
Chinese multinationals and public policy. International Journal of
Emerging Markets. 2014;9(2):205-215 [17]Schweizer D, Walker T, Zhang A.
Cross-border acquisitions by Chinese enterprises: The benefits and
disadvantages of political connections.
Journal of Corporate Finance. 2019;57: 63-85
[18]Lattemann C, Zhang W, Gugler P, Vanoli L. Technology-sourcing
investment abroad as an enhancer of Chinese MNEs’innovative capabilities.
International Journal of Emerging Markets. 2015;10(2):243-271
[19]Chen Y, Guo W. Do Cross-border M&As Increase Chinese Enterprises’
competitive advantages? A test based on the specific advantages of regional and non-regional enterprises. Foreign Economics & Management. 2019;41 (04):139-152
[20]Li J, Oh CH. Research on emerging- market multinational enterprises:
Extending Alan Rugman’s critical contributions. International Business Review. 2016;25(3):776-784
[21]Bhaumik SK, Driffield N, Zhou Y.
Country specific advantage, firm specific advantage and
multinationality–sources of competitive advantage in emerging markets:
Evidence from the electronics industry in China. International Business Review.
2016;25(1):165-176
[22]Buckley PJ, Clegg LJ, Cross AR, Liu X, Voss H, Zheng P. The determinants of Chinese outward foreign direct investment. Journal of International Business Studies. 2007;38(4):499-518 [23]Grøgaard B, Rygh A, Benito GR.
Bringing corporate governance into internalization theory: State ownership and foreign entry strategies. Journal of International Business Studies. 2019;50 (8):1310-1337
[24]Ahlstrom D, Chen SJ, Yeh KS.
Managing in ethnic Chinese
communities: Culture, institutions, and context. Asia Pacific Journal of
Management. 2010;27(3):341-354 [25]Li Y, Zhang YA, Shi W. Navigating geographic and cultural distances in international expansion: The
paradoxical roles of firm size, age, and ownership. Strategic Management Journal. 2020;41(5):921-949
[26]Rudy BC, Miller SR, Wang D.
Revisiting FDI strategies and the flow of firm-specific advantages: A focus on state-owned enterprises. Global Strategy Journal. 2016;6(1):69-78
[27]Mathews JA. Competitive advantages of the latecomer firm: A resource-based account of industrial catch-up strategies. Asia Pacific Journal of Management. 2002;19(4):467-488 [28]Buckley PJ, Hashai N. The role of technological catch up and domestic market growth in the genesis of
emerging country-based multinationals.
Research Policy. 2014;43(2):423-437 [29]Chacar AS, Newburry W, Vissa B.
Bringing institutions into performance persistence research: Exploring the impact of product, financial, and labor market institutions. Journal of
International Business Studies. 2010;41 (7):1119-1140
[30]Helpman E, Melitz MJ, Yeaple SR.
Export versus FDI with heterogeneous firms. American Economic Review.
2004;94(1):300-316
[31]Malhotra S, Lin X, Farrell C. Cross- national uncertainty and level of control in cross-border acquisitions: A
comparison of Latin American and US multinationals. Journal of Business Research. 2016;69(6):1993-2004 [32]Johanson J, Vahlne JE. The
internationalization process of the firm:
A model of knowledge development and increasing for. Journal of International Business Studies. 1977;8(1):23-32 [33]Peng MW. The global strategy of emerging multinationals from China.
Global Strategy Journal. 2012;2(2):97- 107
[34]Buckley PJ, Munjal S, Enderwick P, Forsans N. The role of experiential and non-experiential knowledge in cross- border acquisitions: The case of Indian
multinational enterprises. Journal of World Business. 2016;51(5):675-685 [35]Basuil DA, Datta DK. Effects of industry-and region-specific acquisition experience on value creation in cross- border acquisitions: The moderating role of cultural similarity. Journal of Management Studies. 2015;52(6):766- 795
[36]Levitt B, March JG. Organizational learning. Annual Review of Sociology.
1988;14(1):319-338
[37]Zhou AJ, Fey C, Yildiz HE. Fostering integration through HRM practices: An empirical examination of absorptive capacity and knowledge transfer in cross-border M&As. Journal of World Business. 2020;55(2):100947
[38]Johanson J, Vahlne JE. Building a model of firm internationalisation.
Learning in the internationalisation process of firms. 2003:3-15
[39]Sawada N. Technology gap matters on spillover. Review of Development Economics. 2010;14(1):103-120 [40]Rabbiosi L, Elia S, Bertoni F.
Acquisitions by EMNCs in developed markets. Management International Review. 2012;52(2):193-212
[41]Sarala RM, Vaara E, Junni P. Beyond merger syndrome and cultural
differences: New avenues for research on the“human side”of global mergers and acquisitions (M&As). Journal of World Business. 2019;54(4):307-321 [42]Cannizzaro AP, Weiner RJ. State ownership and transparency in foreign direct investment. Journal of
International Business Studies. 2018;49 (2):172-195
[43]Meyer KE, Ding Y, Li J, Zhang H.
Overcoming distrust: How state-owned enterprises adapt their foreign entries to institutional pressures abroad. Journal of
International Business Studies. 2014;45 (8):1005-1028
[44]Pinto CF, Ferreira MP, Falaster C, Fleury MTL, Fleury A. Ownership in cross-border acquisitions and the role of government support. Journal of World Business. 2017;52(4):533-545
[45]Dunning JH, Kim C, Park D. Old wine in new bottles: A comparison of emerging-market TNCs today and developed-country TNCs thirty years ago. The rise of transnational
corporations from emerging markets:
Threat or opportunity. 2008:158-180 [46]Ellstrand AE, Tihanyi L, Johnson JL.
Board structure and international political risk. Academy of Management Journal. 2002;45(4):769-777
[47]Li L, Liu X, Yuan D, Yu M. Does outward FDI generate higher productivity for emerging economy MNEs?–Micro- level evidence from Chinese
manufacturing firms. International Business Review. 2017;26(5):839-854 [48]Liang H, Ren B, Sun SL. An anatomy of state control in the
globalization of state-owned enterprises.
Journal of International Business Studies. 2015;46(2):223-240
[49]Li J, Chen L, Yi J, Mao J, Liao J.
Ecosystem-specific advantages in international digital commerce. Journal of International Business Studies. 2019b;
50(9):1448-1463
[50]Li F, Chen Y, Liu Y. Integration modes, global networks, and knowledge diffusion in overseas m&as by emerging market firms. Journal of Knowledge Management. 2019a;23(8)
[51]Makri M, Hitt MA, Lane PJ.
Complementary technologies,
knowledge relatedness, and invention outcomes in high technology mergers and acquisitions. Strategic Management Journal. 2010;31(6):602-628
[52]Jiang, G. H. (2017).‘Has China's corporate cross-border mergers and acquisitions really failed?’.Financial Research, (4), 46-60.
[53]Huang L, Zhang H, Liu W. Research on the relationship between Chinese Enterprise M&a Experience and Transnational M&a Shares. Chinese Journal of Management. 2017a;14:1134- 1142
[54]Huang Z, Zhu H, Brass DJ. Cross- border acquisitions and the asymmetric effect of power distance value
difference on long-term post-acquisition performance. Strategic Management Journal. 2017b;38(4):972-991
[55]Olley S, Pakes A. Market share, market value and innovation in a panel of British manufacturing firms.
Econometrica. 1996;64(6):1263-1297 [56]Levinsohn J, Petrin A. Estimating production functions using inputs to control for unobservables. The Review of Economic Studies. 2003;70(2):317- 341
[57]Coelli, T. J., Rao, D. S. P., O'Donnell, C. J., & Battese, G. E. (2005).An
Introduction to Efficiency and Productivity Analysis. Springer Science & Business Media.
[58]Luo Y, Tung RL. A general theory of springboard MNEs. Journal of
International Business Studies. 2018;49 (2):129-152
[59]Jiang GH, Jiang DC. The‘export effect’of Chinese Enterprises' foreign direct investment. Economic Research.
2014;5:160-173
[60]Birkinshaw J, Bresman H, Nobel R.
Knowledge transfer in international acquisitions: A retrospective. Journal of International Business Studies. 2010;41 (1):21-26
[61]Fan ZY, Tian B. Tax competition, tax law enforcement and corporate tax avoidance. Economic Research. 2013;9:
99-111
Selection of our books indexed in the Book Citation Index in Web of Science™ Core Collection (BKCI)
Interested in publishing with us?
Contact [email protected]
Numbers displayed above are based on latest data collected.
For more information visit www.intechopen.com Open access books available
Countries delivered to Contributors from top 500 universities
International authors and editors
Our authors are among the
most cited scientists
Downloads
We are IntechOpen,
the world’s leading publisher of Open Access books
Built by scientists, for scientists
12.2%
169,000 185M
TOP 1%
154
6,200
Self-Government in Yugoslavia:
The Path to Capitalism?
Alpar Losoncz, Andrea Ivanišević and Mark Losoncz
Abstract
This chapter analyzes self-governing Yugoslavia in the context of capitalism.
Regarding the problem of capitalism in socialist world, the practice of the former Yugoslavia cannot be ignored. The socialist Yugoslavia was predetermined to be qualified as capitalist. The Yugoslav leadership developed: (a) self-government, (b) elements of market-biased socialism, and (c) openness to the international economy or the integration in the world market. Its economy achieved remarkable results by the mid-1960s. Some notable economists compliment the results and suggest that the model is sustainable. However, since the mid-1960s, regressive tendencies have emerged that perpetuate significant social dissatisfaction. In 1968, students protested against the state of Yugoslav socialism, believing that it had absorbed capitalism. Others felt that Yugoslav socialism had not sufficiently developed market-based socialism. There were authors that argued that Yugoslav socialism had become capitalist but without capitalist rationality. In the 1970s, the de iure existing federation became a de facto confederation with closed national economies. The chapter discusses the presence of elements of capitalism in this form of socialism based on (a) dependence on the world market, (b) banks as the institutionalization of “financial mode of capital,” and (c) the existence of perpetu- ated unemployment.
Keywords: self-management, Yugoslavia, socialism, capitalism, market
1. Introduction
Emerging after World War II, Yugoslavia was destined to be qualified as a capitalist country. Its openness to the world market, market-framed consumption, self-management that introduced democracy to economic entities, and supremacy over the working class are just a few things that have always fueled suspicion about the socialist character of Yugoslavia. However, the same qualification was given from different sources and with different intentions: sometimes as a stigma and sometimes as a praise. The list is long: as early as 1951, a prominent Trotskyist economist Ernest Germain (Mandel) [1] wrote that the emergence of the restora- tion of capitalism in Yugoslavia was imminent.1 In 1963, a Chinese party leadership said that there had been a “counter-revolution” and “replacing of socialism with capitalism” in Yugoslavia [2]. Paul Sweezy [3], a well-known American economist, also argued in the panorama of socialist countries in the 1960s that the existing socialist countries (except China) had opened the door to the invasion of capitalist
1 Yet, we should note that Mandel believed all socialist countries to be capitalist.
content, and Yugoslavia did it as well. Now, let us do a little time traveling: Ernst Lohoff [4], a modern German Marxist, used the term “ideeller Gesamtkapitalisten”
(ideal total capitalist) to describe the Yugoslav situation, that is, to represent the communist party which took care of the “social capital.”
This does not mean that the list is exhausted. The mentioned assessments defi- nitely stand for certain elements of the historically created situation in Yugoslavia.
Yet, they contain certain reductions and do not capture the procedural character of the existence of capitalist aspects in Yugoslavia; if it is claimed that capitalism existed per se in Yugoslavia and a priori a sign of equality is placed between
capitalism and Yugoslav socialism, then some important interpretation dimensions are lost. Socialist Yugoslavia disintegrated at the end of the 1980s, and that already created the impression of predetermination, that is, the absence of any alternatives.
However, capitalism in self-governing socialism arose as an unplanned outcome of various socio-economic determinations and certain conflicts that were actually the articulation of the same conflicts. Capitalism in Yugoslav socialism could not be perceived on the basis of predetermined paths. A conceptual distinction should be made between capitalism and the existence of elements of capitalism: whatever the definition of capitalism we give, it represents a kind of socio-economic complete- ness and wholeness.
First, the paper presents a conceptual clarification based on which we have enframed the selected problems. After that, we are going to determine two ideologi- cal foundations of the Yugoslav system (self-management and social property) and describe, but not in-depth, the characteristic stages of Yugoslav socialism which relate to the chosen topic of our work. The following sections will contain discus- sions of the selected moments that show strong presence of capitalist elements which truly anticipate later capitalism on the ruins of Yugoslavia (reliance on the volatile world market as the supreme arbiter of economic rationality, the supremacy of banking and financial capital over social reproduction, the presence of labor market elements). This chapter does not present empirical investigations, but the claims are supported by empirical illustrations. We will neither discuss the causes of the collapse of Yugoslavia, nor the phenomena of “imitated modernizations.”
We will only treat the problem of the existence of capitalism in self-governing Yugoslavia on the basis of selected examples.