Competition between global professional service firms and local audit firms in China: a strategic action field perspective

Purpose: This study aims to examine competition between global professional service firms (GPSFs) and Chinese local audit firms (LAFs) over the past four decades, explaining the process and outcomes of this competition in relation to shifting economic policy priorities. Design/methodology/approach: The authors analysed pertinent documents and media reports through the lens of strategic action field (SAF). The authors interpret the dynamics of the competition against the background of the shifting framing of Chinese economic policies. Findings: The authors find that frame alignment with the state’s priorities in China enabled GPSFs and LAFs to secure stronger market positions relative to each other in different episodes of the Chinese policy landscape. The Chinese state’s marketisation reforms conditioned the outcome of the competition between GPSFs and LAFs. Initially, GPSFs gained access to the Chinese accounting field and achieved a strong market position by leveraging China’s “open-door” policy. This situation was reversed when China’s economic policy shifted to “going global” because Chinese LAFs pursued internationalisation framing thereby aligning with the state’s priority of internationalising the economy. Originality/value: Using the lens of SAF, this study offers theorised insights into how transnational competition in the accounting field plays out in a non-Western state setting.