One Network, Three Systems: Misalignment of Institutional Logics in the Global Production Networks of Chinese Movies in the 1990s

Abstract

Recent discussion on comparative capitalism and global production networks has shed light on the role of national political economies in global economic integration. This body of literature focuses predominantly on the structural conditions, at both the global and local level, that underpin the development of trans-border networks of production. While global production networks, despite their transnational nature, remain territorially embedded, they are exposed to diverse institutional settings in different societies. Globally-oriented firms may, therefore, develop a melange of organizational forms and strategies that allow them to adapt to different institutional environments. These strategies, however, do not always align with the institutional logic in the production network. If this happened, the misalignment between the firms’ strategies and the network’s particularities may undermine the competitive advantage of the production network. This study examines how firms cope with this situation and their dissimilar fortunes in the Hong Kong-Taiwan-China film industries that were once a burgeoning field of movie production owing to their cross-border networks during the late 1980s yet declined abruptly in the mid-1990s when Hollywood made a comeback into the Hong Kong and Taiwan film market. The analysis contributes to the debate on the relative importance of global market forces and national institutional configurations to the evolution of global production networks. It accentuates the importance of the interactions between globally-oriented firms, namely, the Hollywood exporters, and the locally-embedded players – the Chinese film producers, distributors and cinemas – to our understanding of global economic integration and market transformations.