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Cited by 198International Business and FDIGlobal trade, sustainability, and social impactEconomic Zones and Regional Development

Transnational Corporations and ‘Obligated Embeddedness’: Foreign Direct Investment in China's Automobile Industry

Liu, Weidong, Dicken, Peter·2006·Environment and Planning A: Economy and Space
DOI 10.1068/a37206
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Abstract

With the aid of an empirical case study of the automobile industry in China, we explore how, under certain political–economic conditions, the investments of transnational corporations (TNCs) can be shaped to meet the state's objectives. We develop the concept of ‘obligated embeddedness’ to capture the dynamics of this process. We show that foreign direct investment in the automobile industry in China is a type of market-led and embedded investment which is characterised by joint ventures and the follow-up network configurations. However, to achieve such obligated embeddedness on the part of TNCs—and for the state and its citizens to gain its benefits—the state not only has to have the theoretical capacity to control access to assets located within its territory, but also the power actually to determine such access.

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Crossref · 10.1068/a37206

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16 of 16 references verified0 citation errors · 0 not checkable

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  • In China, government industrial policy dictates that inward FDI in automotive MNEs should take a JV form (obligated embeddedness).

    “This is the case with ''obligated embeddedness'' (Liu & Dicken, 2006: 1238) of automotive MNEs in China, where the government's industrial policy dictates that inward FDI should take a JV form.”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Liu & Dicken, 2006

  • Host country institutions can attract investment by lead firms through policies encouraging local content and promoting local supplier linkages.

    “Host country institutions can both attract investment by lead firms through policies encouraging local content and promoting local supplier linkages (Amendolagine et al., 2019;Dawley, MacKinnon, & Pollock, 2019;Liu & Dicken, 2006;Sturgeon et al., 2008;Yeung, 2016), and deter such investment due to insufficient IP protection and underdeveloped legal systems (Gooris & Peeters, 2016).”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Liu & Dicken, 2006

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Authors
Liu, W., & Dicken, P.
Affiliations
  • Chinese Academy of Sciences (CN)
  • University of Manchester (GB)
Corresponding author
  • Liu, Weidong
  • Dicken, Peter
ORCID
Liu, Weidong
Venue
Environment and Planning A: Economy and Space
Publisher
SAGE Publications
Published
2006-07
Volume
38
Issue
7
Pages
1229-1247
ISSN
  • 0308-518X (ISSN-L)
  • 1472-3409
DOI
10.1068/a37206
OpenAlex
W1984199748
Cited by
198
References
16
Citations by year
2026: 6 · 2025: 8 · 2024: 9 · 2023: 10 · 2022: 12 · 2021: 5 · 2020: 17 · 2019: 5 · 2018: 18 · 2017: 16 · 2016: 12 · 2015: 9 · 2014: 12 · 2013: 11 · 2012: 10
FWCI
17.59
Type
journal article
Language
en
Open access
closed
Licence
journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
Locations
  • Environment and Planning A Economy and Space (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Institute of Geographic Sciences and Natural Resources Research, CAS Institutional Repository (submittedVersion)
  • Research Explorer (The University of Manchester) (submittedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Zones and Regional Development
Keywords
multinational corporations, foreign direct investment, automotive industry, joint ventures, China

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