Chinese policies toward foreign investments have been increasingly flexible, precisely those concerning the transfer of their capital toward international markets as willed by the “Going Global” policy initiated in the early 2000s. In this flow, several cases of corporate combinations have occurred around the world between Chinese firms and others. This paper analyzes the case of Paktel and China Mobile that took place in 2007, in the era prior to the new leading Chinese initiative called the One Belt and One Road (OBOR), with the purpose of better understanding the motives and the framework of this strategic corporate behavior. After analyzing the case from the theories of firm internationalization and institution-based view, the paper suggests that the loosening of Chinese policies toward foreign investments in the beginning of the 21st century has greatly influenced the growing level of Chinese overseas investments and mostly has boosted Chinese Merger and Acquisition (M&A) deals around the world. However, in Pakistan only few cases of M&As have been recorded during the observed period. Additionally, the paper found evidence to support good firm performance in post-M&A era for the Chinese firms. These imply that policies established by institutions have an impact on firms’ organizational strategic decision-making and that Chinese firms can perform well on international markets. Due to the qualitative methodology used in this research, the suggestions and implications are limited but still provide some highlights on the effects of institution-based investment policies on firm’s strategic behaviors. Further, the paper could be extended to an analysis of the Chinese M&As in Pakistan in the post-OBOR era for more cases can be expected with the effective enforcement of the initiative in Pakistan.
Bank deregulation, environmental regulation and pollution reduction: evidence from Chinese firms
