Lancaster EPrints

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

Wu, Xianming and Liu, Xueyuan and Huang, Qihai (2012) Impact of the Institutional Environment on the Choice of Entry Mode: Evidence from Chinese Enterprises. China: an International Journal, 10 (1). pp. 28-50.

Full text not available from this repository.

Abstract

This article studies the influence of the institutional environment on Chinese enterprises' selection of entry mode for overseas investment from three dimensions: regulation, normalisation and imitation mechanisms. The results show that the regulation mechanism has a significant influence on the choice of mode of entry for overseas investment. Chinese enterprises tend to make investments in the form of acquisitions and wholly-owned subsidiaries in countries with sound policies, laws and formal institutional factors. The normalisation mechanism takes into consideration the influence of informal institutional factors including cultural distance mainly through adjustment of ownership mode. The greater the cultural distance between the host country and China, the higher the possibility that Chinese enterprises will opt for the joint venture mode of entry. The imitation mechanism takes into account the degree of integration between parent and subsidiary companies. Chinese enterprises which are highly integrated are likely to enter the local market via greenfield investment. Unlike the transnational enterprises of many developed countries, international experience has no significant impact on Chinese enterprises' choice of mode of entry for overseas investment.

Item Type: Article
Journal or Publication Title: China: an International Journal
Subjects: P Language and Literature > P Philology. Linguistics
Departments: Faculty of Arts & Social Sciences > Linguistics & English Language
ID Code: 56914
Deposited By: ep_importer_pure
Deposited On: 10 Aug 2012 17:57
Refereed?: Yes
Published?: Published
Last Modified: 09 Apr 2014 23:58
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/56914

Actions (login required)

View Item