Post-merger integration and subsidiary roles in Chinese MNCs – the case of Chinese M&As in Germany

Abstract

Purpose This paper adds to the literature on outward Foreign Direct Investments by Chinese Multinational Corporations (MNCs) in advanced economies. Its objective is threefold: to characterize the subsidiary roles that advanced economy targets of Chinese Multinational Corporations (CMNC) takeovers typically adopt, to assess the position that these subsidiary roles grant them within the CMNCs as a whole and to flesh out how subsidiary actors perceive and make sense of the particular constellation as a subsidiary of a CMNC. Furthermore, this paper aims to contribute to theory development on headquarters‐subsidiary relations by suggesting an additional theoretical lens. Design/methodology/approach The paper draws on in-depth qualitative case studies from the automotive, mechanical engineering and solar industries and focuses on German firms that have been acquired by Chinese MNCs. Theoretically, the present paper draws on extant post-merger integration (PMI) and subsidiary role research, particularly from a micro-political and sensemaking perspective, refined by adding a neo-imperial dominance – lens. Findings The paper reveals the subsidiary roles that German subsidiaries of Chinese MNCs typically adopt and discovers the PMI pattern of “reverse integration” delineating quite a particular form of reverse knowledge transfer. Regarding human integration, it emphasizes the importance of neo-imperial attitudes surfacing in the German subsidiaries. Originality/value The value of the paper is in contributing to fill the pending research gap on the subsidiary roles that advanced economy subsidiaries of Chinese MNCs adopt, on the resulting positions of these subsidiaries within the overall Chinese groups and the sense that subsidiary actors make of being acquired by a Chinese MNC. The paper also reveals the importance of neo-imperial dominance patterns and attitudes in PMI in the constellation scrutinized.