Variable interest entity, offshore domesticated foreign finance, and the political economy of China's internet firms: The case of Alibaba

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dc.contributor.authorZhao, Can
dc.date.accessioned2022-10-27T17:55:12Z
dc.date.available2022-10-27T17:55:12Z
dc.date.copyright2022en_US
dc.date.issued2022
dc.description.abstractThis article aims to show how the globalized securities market in general and a transnational legal business structure named variable interest entity (VIE) in particular has challenged our conventional understanding of “foreignness” as a geographical concept in cross-border capital flow and ushers in a new type of foreign investment which I call “offshore domesticated foreign finance” (ODFF). By performing a case study on Alibaba—one of the world’s leading VIE-structured Internet companies—and mapping out the company’s fund-raising history and personnel appointment mechanism with the help of company releases and news reports, this article shows how ODFF makes a company de jure foreign-incorporated and -owned but de facto China-based and Chinese-controlled. This article also demonstrates that ODFF’s primary function is to allow China-based Internet firms to tap into international financial markets while helping Chinese entrepreneurs and managers—despite their minority shareholdings—to control the company. These findings shed light on how financial globalization has transformed the cross-border capital movement and corporate governance.en_US
dc.description.reviewstatusRevieweden_US
dc.description.scholarlevelFacultyen_US
dc.description.sponsorshipI note with gratitude financial support from the Social Sciences and Humanities Research Council of Canada’s doctoral fellowship 752-2020-2387, and Graduate Student Fellowship offered by Centre for Global Studies of University of Victoria (2019–20).en_US
dc.identifier.citationZhao, C. (2022). “Variable interest entity, offshore domesticated foreign finance, and the political economy of China’s internet firms: The case of Alibaba.” Social Sciences, 11(3), 99. https://doi.org/10.3390/socsci11030099en_US
dc.identifier.urihttps://doi.org/10.3390/socsci11030099
dc.identifier.urihttp://hdl.handle.net/1828/14343
dc.language.isoenen_US
dc.publisherSocial Sciencesen_US
dc.subjectglobalizationen_US
dc.subjectcapitalismen_US
dc.subjectinternet companyen_US
dc.subjectcross-border capital flowen_US
dc.subjectforeign investmenten_US
dc.subjectcorporate financeen_US
dc.subjectcorporate governanceen_US
dc.subjectAlibabaen_US
dc.subjectvariable interest entity (VIE)en_US
dc.titleVariable interest entity, offshore domesticated foreign finance, and the political economy of China's internet firms: The case of Alibabaen_US
dc.typeArticleen_US

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