Ethnic Chinese Entrepreneurship in Malaysia: On Contextualisation in International Business Studies by Michael Jakobsen (review)

The book provides a fresh look at ethnic Chinese entrepreneurship from a different theoretical framework. It suggests various modes of analysis for examining ethnic Chinese entrepreneurship in a specific national context, which could be used to test the explanatory power of different international business (IB) theories. It introduces the notion of “glocalization” in IB studies, arguing that the analytical study of ethnic Chinese entrepreneurship should embrace global business practices, the context of the national economy and local societies that comprise the formal and informal institutions in a triangular matrix. It delineates the glocalization perspective and argues that the focus of enterprise analysis should be on the processes between the points in the triangular matrix, rather than on inter-ethnic bonding within businesses. By employing this holistic theoretical framework, the study debunks international discourse on ethnic Chinese business practices that essentialize the notion of culture and hence poses challenges to existing IB theories.

The book is divided into four parts. Part One focuses on the global context which begins with a discussion of four different approaches to read the global economy. It gives a critical review of the decoupling perspective and the notion of a “spiky” or “flat” global economy. From the IB approach of market differentiation, it introduces three main types of markets: developed markets, emerging markets and bottom-of-the-pyramid markets. It argues that the glocalization approach deals with all three points of the triangular matrix that provides a holistic approach in reading global political and economic development. However, the first three approaches only address two points of the triangle, namely the global economy and the role of the state in national economy. It strongly argues that only the notion of glocalization is capable of identifying the strings of interdependency and integration between the global and the local.

After this, it gives a critical review of IB theories and then zooms in on institutional theory that deals with formal and informal institutions, which argues that it is simplistic to divide Malaysia into formal and informal institutions when analysing Malaysian society. It points out that there are different societal structures that form Malaysian society and, in such contexts, Malaysian ethnic Chinese and Indian entrepreneurs navigate a complex multi-ethnic landscape that is further complicated with the Malaysian government’s affirmative action policy favouring Malays. To bridge the global-local nexus of analysis on how global economic forces affect the responses of local entrepreneurs and vice versa, Jakobsen suggests the use of an etic and emic approach to capture the nature of these institutions. He is critical of the constructs, definitions and perceptions of culture and view the use of culture in business studies as problematic.

Part Two discusses the regional context. Jakobsen, critical of the cultural thesis, de-essentializes conceptions of “Chinese capitalism” and “Chinese diaspora” in the context of Southeast Asia. He argues that the current diasporic theory is too outdated for use in this regional context. Conversely, he endorses the notion of grounded cosmopolitanism to study ethnic Chinese entrepreneurs and Chinese business networks in Southeast Asia because it relates well with the glocalization perspective. It contextualizes Malaysia in the region of Southeast Asia with the triangular matrix by discussing how foreign investors would assess the Malaysian market, the impact of the national economic policy and the domestic societal factors. With IB theories, Jakobsen argues that the Malaysian economy is incapable of moving upward from an efficiency-driven economy towards an innovation-driven economy as it lacks industrial innovation. The New Economic Model (NEM), an almost neo-liberal policy, is unable to lift domestic Malaysian enterprises up the value chain as the policy does not address socio-economic issues within the local small and medium enterprises (SMEs) community dominated by the Chinese. The NEM, he argues, is just a tool to attract more foreign direct investment. On the other hand, the institutional perspective reveals severe capital and brain drain and increased radical Islamization within...