A Tale of Three Countries: Italian,Spanish and Swiss Manufacturing Operations in China

In this paper, the choice of joint venture versus wholly foreign‐owned enterprise (WFOE), made by Italian, Spanish and Swiss multinationals in China, as shaped by the risk of dissipation of intangible assets, is investigated. Probit estimates, based on an entirely new firm‐level dataset, constructed by the author, show that WFOE is more likely to emerge when know‐how easily spills over – namely for firms endowed with more intangible assets or belonging to high‐tech sectors – in line with the theoretical expectations.