Contracts,Control And Efficiency

The foreign direct investments (FDI) have gradually gained an important position in Chinese national economy since the start of the economic reform and opening-up to the world, which has had significant impact on China's economic development. Before the 1990s, investment by multinational companies (MNC) is achieved mainly through Joint Venture enterprises. Since the metaphase of 1990s, and wholly-owned venture enterprises have become the main MNCs' investment mode and exceeded the Joint Ventures in both newly invested amount and newly established enterprises total. On the other hand, many such joint ventures gradually transform to whole owned ventures through capital increase and merger and acquisition (M&A). Currently, there emerges a tendency for foreign investment wholly owned enterprises in China, especially after its entry into the WTO.FDI have played important roles in China's economic development and outreach to the world. Wholly-owned venture enterprise and joint venture enterprises are different modes of FDI. Two questions emerge: Why does the main FDI mode change so much in recent years? And what are the reasons and purposes of such mode change to wholly owned ventures? Research of the phenomena will be of great operational significance and theoretical values to help understand the MNCs' investment and operation behavior.This dissertation has established a partial contractual theoretical framework to analyze the contract relationship among the international joint ventures from the control aspect, with a focus on the reasons for the creation of such foreign invested enterprises' wholly-owned tendency. It also provides a new perspective and a new framework to explore the behavior of MNCs' enterprises in China.Focusing on the wholly-owned tendency of MNC invested enterprises in China, the dissertation set up a two-stage theoretical model under a partial contractual condition, which uses MNC invested enterprises' control rights as the main variable for analyses. In the dissertation's framework, MNCs' choices about the ownership structure of entry modes are affected by the Chinese political and economic factors during the initial period of investment. MNCs' entry modes are bounded by...