Please use this identifier to cite or link to this item:
|Title:||Entry Modes of Multinational Corporations into China's Market: A Socioeconomic Analysis|
Department of Economics
multinational corporations (MNCs)
direct foreign investment (DFI)
foreign-invested enterprises (FlEs)
|Publisher:||Department of Economics|
|Abstract:||The rapid economic growth of China makes it a fast expanding market in the world, which attracts increasing number of multinational corporations (MNCs) to invest. How to enter this huge and newly liberalised market and what entry mode should be taken, are key questions which need to be answered before any investment takes place. This paper is a study of the entry modes of MNCs in the particular Chinese institutional and business environments within the transaction cost analytical framework. It provides not only theoretical discussion but also an empirical investigation ofMNCs entry modes in China. The main findings of this study are: (1) the entry modes vary according to investors' sociocultural backgrounds, the technology intensity of projects and locations. The multiple regression results indicate that cultural proximity, technology content and liberalised economic environment positively affect foreign equity share in foreign-invested enterprises (FIEs). (2) For investors with sociocultural distance from China, a joint venture is the most suitable mode to enter into Chinese market. This is particularly true for investments using standardised technologies, and for investments based on natural resources or oriented the domestic market.|
|Department/Unit/Centre:||Department of Economics|
|Type of Work:||Working Paper|
|Appears in Collections:||Working Papers - Economics|
This work is protected by Copyright. All rights reserved. Access to this work is provided for the purposes of personal research and study. Except where permitted under the Copyright Act 1968, this work must not be copied or communicated to others without the express permission of the copyright owner. Use the persistent URI in this record to enable others to access this work.
|Paper No. 236, Sun - Sept 1996.pdf||1.23 MB||Adobe PDF||View/Open|
Items in Sydney eScholarship Repository are protected by copyright, with all rights reserved, unless otherwise indicated.