Asia Research Community

Research projects

Current Research Projects at Asia Research Community (ARC)

 

 

The Zones Project

The Zones project aims to explore the structure, conduct, and performance of special economic zones and the enterprises located in these zones in a comparative perspective. The impact of zones on the surrounding economy will also be analyzed. The project is multidisciplinary, including components focusing on international trade, FDI, spillovers and productivity analysis, innovation, organization, labor market issues, cross-cultural communication, tourism, historical analysis, and other research fields. It covers zones in several countries (with focus on Asia, but scope for comparison with other regions), and aims to include a longitudinal perspective, tracing changes in the character of zones and the relationship between zones and their surrounding economy.
The objectives of the project are three-fold: a) to identify the determinants of zone performance in a dynamic perspective; b) to understand the development impact of special economic zones; and c) to highlight the particular management challenges facing zone administrations and companies operating in special economic zones. The conclusions related to these three objectives are all expected to be largely context-specific: the comparative approach is intended to help recognize any patterns related to geography, time, development stage, policy environment or other distinguishing characteristics of the zones or the surrounding national business environment.

This project is an umbrella for several ongoing projects at ARC, including:
On Economic Zone Life Cycles. Forward and Backwards Linkage Processes between Economic Zones and Local Economies in Malaysia (Michael Jakobsen)
SEZs and Industrial Park Development in Central Asia (Aradhna Aggarwal)
Womenomics (Lisbeth Clausen)
See separate descriptions for these projects for more information.

Contact person Ari Kokko
Governing responsible business conduct in Chinese mineral supply chains and investment in the natural resources: a global and an Arctic perspective

My current research takes point of departure in guidance issued by the Chinese Chamber of Commerce for Minerals and Chemicals (CCCMC) relating to responsible supply chains for minerals sourced from outside China, and investments in mining, as well as potentially other natural resources, e.g. rubber, bio-fuel crops etc. My research into this area has considered the Chinese and international political and normative foundations for the guidelines and the application and relevance of the guidelines in specific regional contexts. As part of this I have analysed and discussed the relevance of the guidelines in regard to Chinese interests in mining and minerals in Greenland. Future research plans into this area include an analysis and assessment of the application of the Guidelines, motivations in terms of access to the US and EU markets that require transparency around sourcing for potential ‘conflict minerals’, the uptake by Chinese companies and investors of risk-based due diligence as an emergent risk-management approach seeking to identify and reduce adverse impacts on society, and a potential expansion of the CCCMC guidance to other products.

This research combines my long-term interest in governance modalities and human rights in an East Asian context and a more recent interest business responsibilities for their impacts on human rights

Publications on this topic:
Buhmann, K. (2017). 'Chinese Human Rights Guidance on Minerals Sourcing: Building Soft Power'. Journal of Current Chinese Affairs 46(2) 135-154

Buhmann, K. (2018). 'Chinese mineral sourcing interests and Greenland’s potential as a source of ‘conflict-free’ minerals', Arctic Yearbook, Vol 6/7 (special issue on China seeking Arctic resources – the Arctic seeking resources in China, ed. Jesper W. Zeuthen), available here

Contact Karin Buhmann
Corporate Social Responsibility as public governance of business conduct: The case of China

Displaying a strong state-driven character, China’s approach to corporate social responsibility (CSR) stands out from that in many other states, in particular in the West. This is due in part to a close institutional connection between the state and the market, but it goes beyond what may be perceived as a logical connection in view of China’s socialist market-structure. CSR in China is marked by an explicit deployment by the government at central and some regional levels of CSR as a modality to govern business conduct. Governmental regulation of CSR is arguably more common in some Asian and generally emerging economies than in much of the West. This research explores China’s approach from the perspective of governmental interests in shaping business conduct within and outside the nations’ borders. As part of this, the research explores CSR governance in China at the national and sub-national level the as an example of general relevance to governments concerned with a ‘smart mix’ of regulatory measures, that is, a mixture of soft and hard regulatory modalities comprising policy, incentives, guidance, mandatory requirements and enforcement to enhance business action to reduce adverse impact on society and an increase positive impact in accordance with public policy goals. Currently, labour issues in textile sector and social impacts of minerals imports and minerals supply chains form the key cases.

Publications on this topic:
Buhmann, K. (2018). 'Social transformation and normative change through CSR standards? China’s engagement with international labour law in domestic guidance for the textile sector'. Navein Reet: Nordic Journal of Law and Social Research 19-34. available online here

Buhmann, K. (2017). 'Chinese Human Rights Guidance on Minerals Sourcing: Building Soft Power'. Journal of Current Chinese Affairs 46(2) 135-154

Contact Karin Buhmann
Technology upgrading in China

This project explores technology upgrading of China. We define technology upgrading based on a three-pronged approach, which distinguishes between the intensity of technology upgrading, structural change and global interaction. We use a statistical framework based on patent indicators to measure technological upgrading along these dimension. A first investigation considers technology upgrading of China in comparison to other BRICS economies (1980–2015). We find several unique paths of technology upgrading with different trade-offs between intensity, structural change and the nature of the global interaction. We also find that with increasing intensity of technology upgrading the relative importance of foreign actors and international collaboration declines. A follow-up investigation scrutinizes the role of global interaction for technology upgrading at the level industries for China.

Contributors:

Björn Jindra
Ari Kokko
Guowei Dong

Contact person: Björn Jindra

Related Publication

China research page

An inquiry into the survival and international success of resource-poor firms from China

CARLSBERGFONDET POSTDOC RESEARCH PROJECT
(2016 – 2019)

Objective: Gain a deep understanding of the survival and international success of resource-poor firms in general but with particular focus on China.
Methodology: Building theory from multiple case studies. Data collection from interviews with managers at different levels, company archives, participatory observations, etc.

Theoretical grounding: Resource-based view; generic strategies; competitive dynamics; catching-up; innovation.

Motivation:
In May 2005, Chinese computer company Lenovo acquired the PC section of IBM. In August 2010, Chinese carmaker Geely acquired the Swedish Volvo. In October 2013, Chinese telecom equipment vendor Huawei replaced Swedish Ericsson to be Denmark’s largest telecom operator as TDC’s sole supplier of a DKK 4 billion project to upgrade and manage its country- wide LTE network. In October 2014, Chinese consumer electronics company GoerTek acquired 83% of the shares in Dynaudio, a Danish high-end speakers producer.

These are some high profile examples of Chinese investments in the US and EU. What is significant about these acquisitions is the fact that all of these Chinese investing companies were almost unknown players a decade or two ago. All of a sudden, they are actively and aggressively investing globally. How can this happen? Where does the global competitiveness of these Chinese companies come from? Will the Chinese firms and emerging market firms in general pose a challenge to incumbent firms in the West and Denmark in particular? These are the puzzling questions the project aims to tackle.

Contact person Xin Li

China research page
Chinese knowledge-seeking investments in Europe

This project analyzes Chinese knowledge-seeking foreign direct investments into Europe, e.g. in terms of motives, location, governance and transfer practices. Output:

Gammeltoft, Peter (accepted), ‘Characteristics and Host Country Drivers of Chinese FDI in Europe: a Company-Level Analysis’, International Journal of Technology Management

Gammeltoft, Peter and Bersant Hobdari (accepted), 'Emerging market multinationals, international knowledge flows and innovation', International Journal of Technology Management

Di Minin, Alberto, Jieyin Zhang and Peter Gammeltoft (2012), ‘Chinese Foreign Direct Investment in R&D in Europe: A New Model of R&D Internationalization?’, European Management Journal, 30(3): 189-203.

Contact person Peter Gammeltoft

China research page
Chinese foreign direct investment in Indonesia

This project analyzes Chinese foreign direct investments in Indonesia and the broader Southeast Asian region. Currently, a follow-up study on a previous study in Indonesia is in progress. Output:

Gammeltoft, Peter and Lepi T. Tarmidi (2013), ’Chinese Foreign Direct Investment in Indonesia: Trends, Drivers and Impacts’, International Journal of Technological Learning, Innovation and Development, 6(1-2): 136-160.

Contact person Peter Gammeltoft

China Research page
Southeast Asia research page
Nonmarket strategies for foreign companies in China’s state-capitalist setting

The Chinese government shows no sign of diminishing its grip on market transactions in strategic sectors. For foreign companies this setting is a huge challenge when designing adequate business strategies. On one hand the influence of the state ensures a rapidly growing market, but on the other we see how state priorities, like supporting competitive Chinese technological innovations, can exclude foreign participation. This technological prominence in the state led development strategy is put into regulation through investment catalogues that differentiates between which sectors foreign company participation is prohibited in, limited, or even encouraged. Much more importantly, however, this interest in pushing Chinese innovations often competes with local agendas (e.g. efforts to create local jobs), making it increasingly difficult for companies to know exactly how and when this interest kicks in. Yet, some foreign companies manage to find ways of gaining market access. My research aims at scrutinizing the nonmarket strategies available to foreign companies in this particular situation.

Contact person Nis Høyrup Christensen

China research page
China’s state capitalism and the transition to a sustainable economic model 

Under the important headline of how China’s particular state capitalist system will be able to facilitate a change in development trajectory towards a more sustainable and environmental- friendly economic model, I focus my research on two sectors: Renewable energy and E-vehicles. Both of these sectors are designated as ‘strategic emerging industries’, which means they are characterized by a complex interplay between state interest, state owned companies, and private companies. Though a higher degree of competition seems to be an inherent part of the governance of these sectors, we also see how the full toolbox of industrial policies has been applied with a wide range of subsidies for these emerging industries. I’m interested in the hybrid forms of market institutions that emerge in these settings. What are the consequences of these particular institutional dynamics in terms of market development? What kind of governance issues do they provoke? And what does it mean for China’s longer-term sustainability?  

Contact person Nis Høyrup Christensen

China research page
Studies in Cultural Intelligence of Chinese expatriates

Xiaojun Xu and Verner Worm

In this study, we investigate 366 expatriate–supervisor dyads in 51 Chinese multinational companies and reveal the mutual relationship between cognition-based CQ and behavioral CQ, and discover the underlying mechanism of the common effect of the interrelated components of CQ on domain-relevant knowledge acquisition and subsequent task performance. Our findings indicate that behavioral CQ erect a bridge between cognition-based CQ and domain-relevant knowledge acquisition, as well as task performance. The influence of an expatriate’s cognition-based CQ on domain-relevant knowledge acquisition, as well as task performance, is fully or partially mediated by behavioral CQ. Behavioral CQ powerfully facilitates expatriates’ domain-relevant knowledge acquisition and subsequent task performance, especially when knowledge is highly tacit. The findings have theoretical and practical implications in the context of expatriate management.

Keywords: cognition-based CQ; behavioral CQ; domain-relevant knowledge acquisition; knowledge taticness; task performance

Contact person Verner Worm

China research page
The Political Economy of China’s Strategic Emerging Industries

Looking into China’s Strategic Emerging Industries under the initiative ‘Made in China 2025’, my research seeks to cover the relationship between new regulations and the fostering of state-targeted innovation. Empirically I look at the strategic emerging sectors of New Energy Vehicles, Industry 4.0 and Next Generation Information Communication Technology. The goal is to uncover where policies align and where they divert along with discovering what kind of impact they have on varying stages of innovation and industry formation. Moving from the theoretical paradigm of Political Economy, the latter part of the project looks into the corresponding impacts on industry level. Inquiries will be made into the governing of the knowledge economy along with the creation of new cluster dynamics and the reconfiguration of state and market under China’s State Capitalist System.

Contact person Benjamin Cedric Larsen

China’s local state owned enterprises: varieties of state capitalism, corporate governance and mixed ownership

Key sectors of the Chinese economy are dominated by state owned enterprises (SOEs) owned by central and local governments. They are important tools in advancing industrial policy goals, controlling pillar and key industries domestically, and conducting strategic investments abroad. However, Chinese SOEs are far from being a homogenous group of companies due to different levels of constraints, government ownership and local institutional embeddedness. The purpose of this PhD project is to contribute to the limited literature on diversity within Chinese state ownership by studying local SOEs. Local SOEs are the backbone of provincial economies, and controls the majority of state assets in China today. However, they are embedded in very different sub-national institutional environments, or what can be termed “local varieties of state capitalism”, which shape their corporate governance, ownership structures, and subsequent performance. Through a series of papers, the project will shed light on their institutional embeddedness, mixed ownership reforms, and corporate governance structures including the role of the Party organization in enterprise management. The project positions itself in comparative political economy, and argues that a sub-national analysis highlighting provincial and city level institutional differences is necessary for understanding contemporary state-market relations.

Contact person Kasper Ingeman Beck

SEZs and Industrial Park Development in Central Asia

The landlocked Central Asian countries began developing special economic zones in the early 1990s. However, they failed in generating substantial gains through zones, and eventually, many of them scrapped them. Economic realities changed in these countries over the last decade. Creation of the Eurasian Economic Union, WTO agreements, the upcoming multimodal corridor network across the region, and the proposed silk road strategy have all contributed to   facilitating trade and growth in this formidable region.  To leverage these trade drivers and notwithstanding the earlier experience, these countries have introduced the ‘New’ Special Economic Zone regimes in recent years. A critical question that faces them is : What type of SEZs and SEZ policies are most likely to succeed in these countries? This project, sponsored by the Asian Development Bank, aims at addressing this question. While focusing on Kazakhstan and the Kyrgyz Republic, it proposes to identify the factors that are crucial for the success of SEZs in Central Asia keeping in view the physical, political and economic contexts of the region, and develop strategic frameworks for developing successful special economic zones and industrial parks in the selected countries. The two countries are different in terms of the level of development, income per capita, factor endowment, and human capital. The study will therefore have important implications for developing SEZs in landlocked countries with different economic potential.

Contact person Aradhna Aggarwal
Poverty impacts of SEZs in India: A case study of Andhra Pradesh

with Ari Kokko and Shahzadi B Sheik

Over the past two and a half decades, there has been a proliferation in the number of special economic zones. According to an estimate, in 2005, they accounted for slightly less than 20 percent of exports from emerging and developing economies. Notwithstanding the current hype over SEZs in developing countries, controversies regarding the beneficial effects of SEZs that have been raging since their emergence continue to persist. One of the most controversial aspects of SEZs is their impact on human development and poverty reduction. A significant body of literature now exists addressing the concerns about human development effects of these zones. However, most studies are narrow in scope and are based on case studies or cross sectional surveys. Empirical evidence based on a longitudinal analysis of data is non-existent. This project is an attempt to analyse the poverty reduction effects of SEZs in India using household expenditure surveys for the period from 2002 to 2014. It focuses on Andhra Pradesh, an Indian state with the largest number of manufacturing SEZs and proposes to use difference-in difference technique to analyse the impact of SEZs on poverty levels in the state. The empirical analysis will be supplemented by primary research based on field interviews.

Contact person Aradhna Aggarwal

South Asia research page
On Economic Zone Life Cycles. Forward and Backwards Linkage Processes between Economic    Zones and Local Economies in Malaysia

The focus of this project is a study of the variety of economic zones currently found in Malaysia. It focuses in particular on the life cycles of various types of economic zones as well as on whether they have or have not integrated into the local, regional and national economy. One of the ways in which to study this is to focus on forward and backward linkage processes, as this provides a potential avenue for assessing the various mechanisms that link international and local companies to each other. As a case study in this connection the free economic zone Bayan Lepas in the state of Penang has been chosen. During this research the project has furthermore singled out as a special study how modes of cross-cultural business communication takes place between international companies working in economic zones as well as with local suppliers and sub-contractors. As a case study in this connection the project focuses on the Danish shipping company Maersk Line and its relationship with local suppliers and subcontractors in the Port Klang Free Zone in the state of Selangor as well as with similar companies in the Tanjung Pelepas Port in Johor Bahru district in the southern state of Johor. Currently the project focuses in particular on Maersk’s office in Kuala Lumpur, and how the staff that are mainly Malaysians, manage to partly internalise the company’s global corporal culture, and partly how the staff on the basis of this deals with the suppliers and subcontractors in the Port Klang Free Zone. This case study is expected to provide the researchers with insights into how global and local companies relate to each other in terms of cross-cultural business communication.

Contact persons: Michael Jakobsen and Verner Worm

Southeast Asia research page
Cross-Cultural Business Studies Project:On the Notion of Culture in International Organisations. Navigating a Global Corporate Culture: The Case of Maersk Line

When analysing modes of navigating cross-cultural business communities, most IB studies employ an etic approach that delineates how ethnically owned companies thrive and manoeuvre in complex cross-cultural business contexts. This approach implies employing theoretical models and empirical observations that from a methodological point of view identify a local entrepreneur as either an objectified agent or as an anonymous ‘other’, thus indicating that such approaches have their roots in an ethnocentric academic tradition. Acknowledging the merits of this tradition, this project takes a step further and introduces an emic or contextualised approach that makes local entrepreneurs themselves provide the main bulk of data on why and how they position themselves in a cross-cultural business context the way they do. The main objective of this project is thus to show how local entrepreneurs develop business strategies so as to navigate and grow their companies in a complex cross-cultural business context. The discussion on local entrepreneurship is currently initiated by outlining a theoretical model for how to approach emic studies and is then expected to proceed towards suggesting a methodological approach that is capable of providing the empirical data that supports the development of a model that is based on a combination of etic and emic approaches. Basically, this project constitutes a first step towards developing a generic model of how to deal with context.

Contact persons: Michael Jakobsen and Verner Worm
Compassion and empathy in international Business

The study looks at the future of markets including labor markets East – West and focus mainly of the future well-educated labor force and their requirements to this market as well as the impact of digitalization on organizing global business and changes in organizational culture as a result digitalization and a better educated workforce. The main research question is to what extent do we see global business organizations change in the direction of being more compassionate?
Compassion can be described in the following way: “The first part of the process involves noticing pain—we have to direct attention toward suffering in order to respond with compassion.  The second part involves interpreting suffering in ways that open up our shared humanity and lead us to understand those who are suffering as worthy of our compassion. The third part of the process involves feeling empathic concern—this is the emotional aspect of the process. And the fourth part is acting to alleviate suffering in some way.

Members
Verner Worm, Sven Horak, St. John’s University, New York and Michael Jakobsen
Contact person Verner Worm
 
Vietnam Program

The Vietnamese economy has not only grown at an impressive rate since the introduction of economic reforms in 1986, but it has also gone through a formidable transformation process. Market oriented reforms and an increasing outward orientation have contributed to changing Vietnam from an inward-looking and stagnant socialist economy to a vibrant export hub and a major location for foreign direct investment. Poverty rates have fallen rapidly, living standards have increased, and new industries have emerged. Yet, despite these advances, Vietnam remains a developing country with large regional differences, striking contrasts between urban and rural areas, rising income gaps, and a weakly functioning public sector. The quality of social services, health care, and education has not increased at the same rate as exports and GDP, and the management of public resources is inefficient. Vietnam is still a one-party state with the Communist Party firmly in power, with a large number of state-owned enterprises dominating the economy thanks to protection and privileged access to resources. The transition from a socialist planned economy to a market economy is far from completed.
ARC’s Vietnam program explores various aspects of the continuing economic and social reforms and reform challenges in Vietnam. Past contributions have focused on international trade, industrialization, the role of the state, and macroeconomic management. The current research agenda focuses on the character and role of inward foreign direct investment, the performance of joint ventures between Vietnamese firms and foreign multinational corporations, and various issues related to Vietnam’s many export processing zones and other special economic zones.

Contact person Ari Kokko

Southeast Asia research page

 

The page was last edited by: Asia Research Community // 04/08/2019