Internationalization of Chinese MNCs in the Swedish Market : An Empirical Study on the Role of Institutional Structure and Socio-cultural Factors in the Process of Internationalization

Abstract: China and Sweden are two key players that are highly involved with and significantly benefited from globalization. Sino-Foreign direct investment (FDI) and Multinational Corporations’(MNC) internationalization are major topics in the academic community of international business and management. However, the empirical evidence of how the Chinese MNCs cross-culturally operate in the Swedish market remains fragmented and their internationalization processes are less discussed. By analyzing literature from the areas of internationalization activities, Chinese and Swedish economic system, institutional framework, and cultural values and by supplementing data collected from qualitative interviews with Chinese entrepreneurs in Sweden, this thesis will examine the institutional and societal-culture factors that model Chinese MNCs’ internationalization in Sweden, as well as opportunities and challenges the Swedish market possesses. Interviews with executives of MNCs indicate that human resource issues, market competition, lack of knowledge of the external institutional environment, the skeptical attitude of hosting country towards Chinese enterprises, and ethical difference within work place are the biggest challenges for Chinese MNCs when entering the Swedish market. This thesis offers insights into the differences between the Swedish and Chinese business and social culture, and provides suggestions for Chinese entrepreneurs in becoming more aware of institutional and cultural gaps when entering the Swedish market.