Huawei and ZTE in Malaysia: The Localisation of Chinese Transnational Enterprises

Abstract

While much research has been undertaken on firms’ internationalisation, much less has been written on internationalisation’s other side, localisation. Yet with the rise of emerging economies, especially Chinese transnational corporations, localisation has become an increasingly significant. This article examines the localisation experience of two Chinese telecommunications enterprises – Huawei and ZTE – in Malaysia. By holding these factors constant (the ceteris paribus assumption), several dimensions of localisation are revealed. They are product, workforce, technology, organisation and management. Firm-specific factors matter both in accounting for inter-firm similarities and differences in the manner they localised. Enterprise ownership is also important in explaining firm performance and host countries’ perception of these firms. Leadership styles of these enterprises’ founders also matter. Together, these factors affect the differential pace of firms’ internationalisation and localisation.