FDI entry mode choice of Chinese firms: A strategic behavior perspective |
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Authors: | Lin Cui Fuming Jiang |
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Affiliation: | aSchool of Management, Marketing and International Business, ANU College of Business and Economics, The Australian National University, Canberra 0200, Australia |
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Abstract: | This study investigates the determinants of foreign direct investment (FDI) entry mode choice between a wholly owned subsidiary and a joint venture by Chinese firms that invest overseas. We argue that the FDI entry mode choice of a Chinese firm is primarily influenced by the variables related to the firm's strategic fit in host industry and its strategic intent of conducting FDI. Using survey data of a sample of 138 Chinese firms, the results suggest that a Chinese firm prefers wholly owned subsidiary entry mode when it adopts a global strategy, faces severe host industry competition, and emphasizes assets seeking purposes in its FDI. A joint venture is preferred when the firm is investing in a high growth host market. |
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Keywords: | Foreign direct investment Entry mode Chinese firms Strategic behavior perspective Wholly owned subsidiary Joint venture |
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