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Transnational Corporations and ‘Obligated Embeddedness’: Foreign Direct Investment in China's Automobile Industry
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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“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
In the citing paper
“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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Metadata
- 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
- 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
- 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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