The Research On The Relationship Between Domestic Horizontal Integration Of Chinese Enterprises And International Ownership Advantages

Since China joined the WTO, China’s market shifted from the limited opening into overall opening. With the boundary between domestic market and international market disappeared, the country specific advantage which Chinese firms gained exclusively In the early days of reform and opening up has been shared with foreign enterprises which enter Chinese Market, Chinese enterprises faced the competition pressure from domestic and abroad. To build international competitive advantage is the key for Chinese enterprises to survive and develop. At present, facing domestic market’s segmentation, there were some enterprises obtained the high performance throug the path that is implementing the strategy of domestic horizontal consolidation first and internationalization secondly. Therefore, in order to find the sources and the constructed path of international competitive advantage of Chinese enterprises, this study is to explore the relationship between Chinese enterprises’ domestic horizontal integration and international ownership advantages.At first, this paper makes literature reviews about international competitive advantage, ownership advantage, horizontal integration and political connection. On this basis, the concept of the model is put forward and the relationships between the variables in the model are discussed. Then regression analysis based on the data of listed companies from 2008 to 2010 was conducted for the research hypothesis test. Finally, the research conclusion is gained by discussing the empirical results, such as follows: First, Chinese enterprises’ domestic horizontal integration can actually developed Oa and Oi, which also can strengthen Ot directly. Second, to maintain political connection, the resources which were used to cultivate the ownership advantages, especially the traditional ownership advantages were occupied. Political connection has negative regulation effect on the relationship between the domestic horizontal integration and Oa, even has a direct negative effect on Oi. Third, International behavior has no effect on the construction of Oa, both traditional ownership advantages and new ownership advantage has a positive effect on business performance, but the difficulty of three types of ownership advantages to transfer on the international market is different. Study has shown that only Oa would be able to transfer in the process of internationalization currently, and made the contribution to improve performance further.These conclusions show that the Oi is the key to answer the question where Chinese enterprises’ internationalization competitive advantage came from. This study involved in the academic discussion about the amending of OLI theory and enrich the OLI’s connotation, which not only responds to the appeal of current academia about focusing on the domestic institutional effects of emerging markets enterprises’ internationalization behavior, but also has a special significance on the current management practice of Chinese enterprises.