IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Impact of Institutional Environment on the Choice of Entry Mode: Evidence from Chinese Enterprises

Listed author(s):
  • Xianming Wu

    (Wuhan University, China)

  • Xueyuan Liu


    (Wuhan University, China)

  • Qihai Huang

    (Lancaster University Business School in the UK)

Registered author(s):

    This paper studied the influence of institutional environment on selection of entry modes for Chinese enterprises regarding overseas investment from three dimensions, i.e. regulation mechanism, normalization mechanism, and imitation mechanism. According to the results obtained from the Chinese enterprises, the regulation mechanism in institutional environment has significant influence on selection of entry mode of overseas investment. The sounder the policies, laws and other formal institutional factors of the host country, the more Chinese enterprises tend to select the entry modes of acquisition and wholly owned subsidiary. In respect of normalization mechanism, Chinese enterprises deal with the influence of informal institutional factors including cultural distance mainly through adjustment of ownership mode; the longer the cultural distance between the host country and China, the more the Chinese enterprises tend to choose the entry mode of joint venture. In respect of imitation mechanism, the higher the degree of integration of parent and subsidiary companies, the more the enterprises tend to enter the local market through greenfield investment. Different from the situation of transnational enterprises from many developed countries, international experience has no significant influence on Chinese enterprises' selection of entry mode of overseas investment.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Ottawa United Learning Academy in its journal Transnational Corporations Review.

    Volume (Year): 3 (2011)
    Issue (Month): 4 (December)
    Pages: 32-53

    in new window

    Handle: RePEc:oul:tncr09:v:3:y:2011:i:4:p:32-53
    Contact details of provider: Postal:
    1568 Merivale Rd. Suite # 618, Ottawa, Ontario, Canada K2G 5Y7

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:oul:tncr09:v:3:y:2011:i:4:p:32-53. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Denny Liao)

    or (Jen Ma)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.