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

  • Cui, Lin
  • Jiang, Fuming
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    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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    File URL: http://www.sciencedirect.com/science/article/pii/S1090951608000783
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    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 44 (2009)
    Issue (Month): 4 (October)
    Pages: 434-444

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    Handle: RePEc:eee:worbus:v:44:y:2009:i:4:p:434-444
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