Bite-size Case Study

A resource-driven acquisition by a Chinese firm

Published on December 31, 2017 Originally recorded 2014   4 min
0:04
There are two main explanations for the motives for OFDI. Based on the mainstream International Business Studies literature, there are generally four motives for OFDI. That's to gain resources, gain markets, enhancing efficiency, or the strategic assets. Another explanation is from the perspective of organizational learning. It's to see two main motives, exploiting or exploring the OFDI. However, in the reality, when we talk about the Chinese communist OFDI, the motives, there might be something more sophisticated. So we see a variety of mixed motives. The sort of case is the acquisition of Neucel by Fulida.
0:60
Neucel is the Canadian company. Fulida is the private company in the hands of, that's the largest viscose staple fiber production company in China.
1:18
Fulida was founded in 1988. They have diversified businesses with more than 20 wholly-owned or jointly-owned subsidiaries including styro printing and dyeing, and the thermoelectricity, chemical, foreign aids, real estate, et cetera. But we see the viscose fiber and the garment fabrics are their main products. They are the world's number three producer of viscose fiber. That's the number one in China. And they produced 50 million meters of garment fabrics in the year 2009, that also we see this the leading company in the garment fabrics. So, the company is quite successful in the viscose fiber and the garment fabrics.
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A resource-driven acquisition by a Chinese firm

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