Forest industry foreign investments: case study of three companies in China

Internationalization of operations constitutes an important part of the global forest industry integration process over recent decades. As a resource based industry, drivers of corporate expansion have been defined as both resource seeking and market seeking in the global context. China is regarded as one of the most dynamic countries with development potential concerning both resources and markets to attract foreign direct investment (FDI). From 2004 to 2008, FDI in the forest industry in China has doubled and FDI projects have maintained around 550 cases annually. The high density of investments has raised critical issues with respect to business ethics including corporate environmental sustainable development and interactions with communities at the local level. The aim of this study is to use a case study approach to compare the process of FDI in the forest industry in China and to explore the sustainability of operations from corporate governance viewpoint. Three case companies headquartered in Europe, North America and Asia were chosen. Corporate FDI strategies, financial performance, cooperation with local community and stakeholder involvement were evaluated and compared. Finally, managerial suggestions will be given case by case referring to the corporate sustainable operations in China