TY - JOUR
T1 - Entry mode choice and performance
T2 - Evidence from taiwanese FDI in China
AU - Chen, Ming Yuan
N1 - Funding Information:
Ming-Yuan Chen (mychen@mgt.ncu.edu.tw) is an associate professor at the Graduate Institute of Human Resource Management, National Central University. This research was financially supported by the Taiwan National Science Council (NSC-98-2410-H-032-034). The author thanks the anonymous referees and the editor for their valuable comments and insights that helped improve this paper.
PY - 2012/5/1
Y1 - 2012/5/1
N2 - This paper examines entry mode choices between wholly owned subsidiaries (WOSs) and joint ventures (JVs) and the impact on performance for Taiwanese foreign direct investment in China. Taiwan and China share common cultural traits, so Taiwanese investors inherently prefer WOSs because these investors are acquainted with local conditions in China. This paper shows that even if WOSs are a natural choice, transaction cost theory is applicable in explaining the adoption of JVs by Taiwanese firms when investing in China. Firms that choose WOSs generally have higher sales growth and superior profitability. However, the smaller the subsidiary and the less experienced the firm, the more likely that JVs will have better performance.
AB - This paper examines entry mode choices between wholly owned subsidiaries (WOSs) and joint ventures (JVs) and the impact on performance for Taiwanese foreign direct investment in China. Taiwan and China share common cultural traits, so Taiwanese investors inherently prefer WOSs because these investors are acquainted with local conditions in China. This paper shows that even if WOSs are a natural choice, transaction cost theory is applicable in explaining the adoption of JVs by Taiwanese firms when investing in China. Firms that choose WOSs generally have higher sales growth and superior profitability. However, the smaller the subsidiary and the less experienced the firm, the more likely that JVs will have better performance.
KW - bivariate probit model
KW - entry mode choice
KW - performance
KW - transaction cost theory
KW - treatment effects model
UR - http://www.scopus.com/inward/record.url?scp=84865213487&partnerID=8YFLogxK
U2 - 10.2753/REE1540-496X480302
DO - 10.2753/REE1540-496X480302
M3 - 期刊論文
AN - SCOPUS:84865213487
VL - 48
SP - 31
EP - 51
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
SN - 1540-496X
IS - 3
ER -
