Firm Survival between Manufacturing and Non-Manufacturing Industries: Cultural Distance, Country Risk, Entry Mode, Market Size, Firm Age and Location

Chuang Wang and Evangelos Giouvris

Chinese Economy, 2020, vol. 53, issue 5, 412-431

Abstract: Survival in a foreign market is not always the same as in the home market. This study examines interaction effects between cultural distance, country risk, entry mode, firm age, investment location and market size on firm survival. A distant culture is related to a lower survival rate but the greater the market size and the older the firm, the less severe the effect. Wholly owned subsidiaries have the highest survival rate. However, as market size and the age of the firm grow, the survival rate of equity joint ventures increases while that of wholly owned subsidiaries remains unaffected. Country risk is negatively related to survival rate. The negative impact of country risk in Eastern China is lower than any other region of China and manufacturing firms suffer less negative impact of country risk and cultural distance than non-manufacturing firms.

Date: 2020
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DOI: 10.1080/10971475.2020.1730564

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