The Internationalization of Ethnic Chinese Business Firms from Southeast Asia: Strategies, Processes and Competitive Advantage*

The globalization of economic activities is a relatively recent phenomenon. Since the 1960s, the global economy has become increasingly interdependent and functionally integrated through cross-border flows of capital, goods and people. The role of transnational corporations (TNCs) in these cross-border activities is particularly important. The outward foreign direct investment (FDI) stock of TNCs grew from a meagre US$129 billion in 1970 to US$1,146 billion in 1988 (UNCTAD, 1994: Table I.8). By the end of 1995, there were some 39,000 TNCs in the world, which controlled more than 270,000 foreign affiliates. They had a combined outward FDI stock of more than US$2.7 trillion (UNCTAD, 1996). The outcomes of this accelerated process of globalization are manifested in the increasing global interdependence of national economies and Triadization. In the former case, the economic fortunes of countries are intertwined with the global shift of economic activities (Dicken, 1998). In the latter, three distinct regions have emerged as the leading centres of the global economy — North America, western Europe and Asia (Ohmae, 1985; 1995). In recent decades, Chinese business in Southeast Asia has similarly undergone significant transformations. From petty traders and emigrant workers in the early half of the twentieth century, the ‘Overseas Chinese’ and their business firms have emerged as