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How much does industry structure impact foreign direct investment in China?


  • Luo, Yadong
  • Tan, J. Justin


Industry structure imperfection in a foreign market is an important factor which not only makes foreign direct investment (FDI) preferable to trade or licensing but also determines the attractiveness of one host country over others. Today, the structural transformation of transitional economies provides transnational investors with tremendous preemptive opportunities. Since the understanding of the linkage between industry structure and FDI in the context of transitional economies is incomplete, this study provides a "structural attributes" model and assesses the direction and magnitude of performance implications of industry structural factors for FDI in China. Based on a cross-sectional empirical analysis, this work observes a significant impact of structural factors on market and financial performance in international production. Managerial implications for transnational investors are highlighted.

Suggested Citation

  • Luo, Yadong & Tan, J. Justin, 1997. "How much does industry structure impact foreign direct investment in China?," International Business Review, Elsevier, vol. 6(4), pages 337-359, August.
  • Handle: RePEc:eee:iburev:v:6:y:1997:i:4:p:337-359

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    References listed on IDEAS

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    8. Phillips, Almarin, 1976. "A Critique of Empirical Studies of Relations between Market Structure and Profitability," Journal of Industrial Economics, Wiley Blackwell, vol. 24(4), pages 241-249, June.
    9. Weijian Shan, 1991. "Environmental Risks and Joint Venture Sharing Arrangements," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(4), pages 555-578, December.
    10. William H Davidson, 1980. "The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(2), pages 9-22, June.
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    Cited by:

    1. Wang, Chengqi & Hong, Junjie & Kafouros, Mario & Boateng, Agyenim, 2012. "What drives outward FDI of Chinese firms? Testing the explanatory power of three theoretical frameworks," International Business Review, Elsevier, vol. 21(3), pages 425-438.
    2. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2007. "Factors influencing perceptions of performance: The case of western FDI in an emerging market," International Business Review, Elsevier, vol. 16(3), pages 310-336, June.
    3. Fetscherin, Marc & Voss, Hinrich & Gugler, Philippe, 2010. "30 Years of foreign direct investment to China: An interdisciplinary literature review," International Business Review, Elsevier, vol. 19(3), pages 235-246, June.
    4. repec:spr:manint:v:51:y:2011:i:4:d:10.1007_s11575-011-0087-y is not listed on IDEAS


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