Strategic motivations for Sino-Western alliances: a comparative analysis of Chinese and Western alliance formation drivers

This paper compares the key drivers of Sino-foreign alliance formation from the perspective of both Chinese and Western alliance partners. Our results indicate that Chinese companies enter into alliances with Western companies mainly to get accesses to international markets and to develop their technological and managerial competences further, while Western partners aim to gain access to the local customer and supplier bases of their Chinese counterpart as well as to the complex distribution systems found in the Chinese market. In analyzing the differences among Chinese and Western alliance motives, this paper shows how the initial deficiencies in the Chinese institutional environment has shaped the strategic motives of local companies and consequently lead to the diverging alliance formation motives in Sino-foreign alliances.

JEL cdes: F23, L24

Key words: Strategic alliances, China, Innovation, Internationalization

UNU-MERIT Working Papers ISSN 1871-9872