FDI entry mode choice of Chinese firms: A strategic behavior perspective

Lin Cui and Fuming Jiang

Journal of World Business, 2009, vol. 44, issue 4, 434-444

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.

Keywords: Foreign; direct; investment; Entry; mode; Chinese; firms; Strategic; behavior; perspective; Wholly; owned; subsidiary; Joint; venture (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (72)

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