Determinants of FDI Mode Choice and Partner Selection: A Study on Taiwanese Firms Entering the China Market
Date Issued
2011
Date
2011
Author(s)
Chiu, Yi-Ting
Abstract
China began to change its foreign-investment regulations after it entered into WTO (the World trade Organization). This is taken as the most important institutional change since China’s reform and opening-up policy in 1979. The purpose of this research is to find out, under the new institutional environment, what are the factors affecting Taiwanese firms’ decision on entry mode, equity ownership, and partner selection.
With 4,515 firm-level samples in the period of 2002-2008, it has been found that more firms chose wholly-owned enterprises (WOEs) rather than joint venture (JV), and also the equity ownership is increasing. Furthermore, compared with the past research, it has been found that the higher openness level the area, the more likely Taiwanese firms would chose WOEs mode. All the findings have confirmed the effect of the regulation change and the increase in international trade after China entered into WTO.
Subjects
entry mode
FDI
partner selection
institutional theory
Transaction Cost
Type
thesis
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