Between geoeconomic competition and local embeddedness - how Chinese investors influence digitalisation in acquired German manufacturing companies

Abstract

The growing economic and geopolitical importance of digital technologies and data, coupled with the Chinese Government’s expressed ambition for Chinese companies to occupy a leading position in this domain, raises questions regarding the role of acquired foreign subsidiaries in realising this objective. Drawing on comparative capitalism research, this paper discusses how local institutions, investor strategies, and the aspirations of the Chinese Government interact to shape the digital transformation of manufacturing companies in Germany. It empirically investigates how digitalisation is unfolding in 15 German manufacturing companies with Chinese investors and enhances the understanding of the influence of Chinese MNCs on company-level digitalisation abroad. The eight companies that undertake digitalisation projects show that the German companies mainly control the digitalisation of processes while Chinese parent companies and subsidiaries in China play a key role in developing digital business models. This signals a shift in innovation patterns and changes in inter-firm relationships.