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Nonmarket strategies and behaviours for MNEs to build a congenial political economic environment in Mainland China

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  • Yongqiang Gao

Abstract

Successful investing in China requires investors to master a complex political and regulatory environment. Three basic theories – institutional theory, resource dependency theory and agency theory – are useful to explain why and how Multinational Enterprises (MNEs) take nonmarket strategies and behaviours to deal with a host government. Based on these theories, this paper proposes three basic strategies, namely, guanxi strategy, competitive strategy and leverage strategy, for MNEs to deal with the Chinese government and build a congenial political economic environment. The reasons why these strategies are valid and how to use them are also discussed.

Suggested Citation

  • Yongqiang Gao, 2008. "Nonmarket strategies and behaviours for MNEs to build a congenial political economic environment in Mainland China," International Journal of Business Environment, Inderscience Enterprises Ltd, vol. 2(1), pages 89-100.
    • Handle: RePEc:ids:ijbenv:v:2:y:2008:i:1:p:89-100
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