INVESTMENT STRATEGIES AND OVERSEAS CHINESE BUSINESS NETWORKS : A STUDY OF SINGAPOREAN FIRMS IN HAINAN PROVINCE

Abstract

The open-door policy of China and the strong Singaporean regionalisation to China in recent years, have led many scholars and policymakers likewise, to examine the rationale and implications of such transfer of cross-border capital. These analyses of the strategy and organisation of foreign direct investments have increasingly widened their scope to incorporate institutional influences in different geographical environments. This thesis examines the central role of ethno-socio-political institutional forces in influencing the motivations and types of Singaporean Chinese investment strategies, and their organisational structures in Hainan. It is argued that, apart from the strategic-economistic considerations of foreign direct investments, Singaporean investments in Hainan are highly motivated by other historical ethno-social reasons. Similarly, their modes of foreign entry and organisational structures reflect their embeddedness in the socio-cultural values of the Overseas Chinese, as well as the prevailing political systems of the two geographical entities. This enquiry employs qualitative personal interviews to elicit the underlying socio-behavioural information from the mind of businesspersons. The case study approach as the analytical strategy allows an 'all-encompassing' examination of the dialectic interaction of actors (i.e., businessperson and firms) and structures (i.e., ethno-socio-political institutions) in shaping Singaporean investment strategies in Hainan. Drawing on 22 case studies of Singaporean firms in Hainan, this thesis shows that Singaporean investment strategies in Hainan are manifested in the ethno-social institutions of ethnic Chinese culture. At the personal level, direct investments are largely motivated by the historical ethno-social attachment Singaporean Hainanese have for Hainan. The small and medium sized joint ventures largely reflect characteristics of the ethnicity-based Overseas Chinese business network system that stresses greatly on connections or guanxi. Similarly, the influences of social associations (e.g.,clan associations) and state institutions (e.g., public and quasi-public agencies) on Singaporean investment strategies in Hainan reveal the significance of connections at the higher institutional level. This thesis also draws some implications for future research into Overseas Chinese business systems and their investment strategies in China using the institutional approach.