ABSTRACT
Research on Chinese capital in foreign investment and overseas economic
organizations can be roughly divided into two paradigms. The first one is an economic and Western-centric approach that emphasizes the importance of
incentive mechanisms in determining how and why enterprises divest
investments from their own developing countries into other developing
countries. The second one is the social embeddedness approach. The latter
stresses that the decision-making and organizational structures of Chinese
companies engaging in foreign investment are influenced by their local cul-
tural, social, and political contexts (Biggart and Hamilton 1997; Redding
1990; Yeung 1997; 1998). Economic profits are only contingent, but not determining, factors for Chinese enterprises to practice foreign investment
and organize their production structures. Some even push their arguments
further and suggest that network relations based on personal relationships
are causal mechanisms of transnational economic operations for Chinese
enterprises (Yeung 1997:4-5).
