FDI And Outscoring-the Research On International Development Choice Of Enterprises

In the trend of globalization, the enterprises'international development strategy becomes the necessary part of the enterprises'development planning. FDI and outsourcing are two kind of important ways. The enterprises choose the way on the basis of its own conditions and strategic objectives. In this paper, we make research on enterprises international development choice between FDI and outscoring. First of all, it makes the motives model and decision-making model of FDI and outsourcing, and make the comparative analysis between them. It makes the FDI motives model on the basis of the factors: profit, operating elements, market factors, strategic factors, competitive factors. It makes the outsourcing motives model on the basis of the factors: profit, core competencies, cost and risk, economic environment. It makes the comparative analysis between them. Then , it makes the FDI decision-making model on the basis of the factors: the features of the enterprise, industry characteristics, the product cycle. It also makes the outsourcing decision-making model on the basis of the factors: the core competitiveness, the features of the enterprise, market conditions and so on.Secondly, it makes the basis model of the enterprises producing in the principle of maximizing profit. It compares the profit that can be made by the two ways. There are two new parameters.λmeans the technology rising level on the basis of the inferior part's transfer.γmeans A country's output flexibility caused by the investment. It finds that if value of theλis larger, the enterprises prefer the way of outsourcing to FDI and if the value of theγis larger, the enterprises prefer the way of FDI to outscoring. It chooses the data of America from the year 1998 to 2005 and uses the software named Eviews to prove the model.Thirdly, it makes the game balanced model. In the static game, it discusses the parameters influences to the choice of the enterprises. The numerical of the production is bigger, the enterprises prefer FDI. The ratio of FDI's early gains to outsourcing early gainsθis larger; the enterprises prefer the way of FDI. The ratio of FDI's gains of each proceedsνis larger, the enterprises prefer the way of FDI. The loss caused by the competition between the two ways is larger; the enterprises prefer the way of outscoring. Then, it makes the dynamic game and discusses the parameters'influences.Fourthly, It makes the empirical analysis about the choice between the two ways. It discusses the influences to the choices between the FDI and outscoring of America enterprises on the basis of monopoly advantages, enterprises system, innovation, national policies. Then it discusses the influences to the choice between the FDI and outscoring of Japanese enterprises on the basis of capital advantage, market factors, strategic factors and policy factors. Last, it discusses the influences to the choice between the FDI and outscoring of Developing Country enterprises on the basis of elements, efficiency factors, strategic factors and policy factors.Finally, it gives the advice on the basis of the enterprise's own characteristics, the product cycle, strategic goals, and country factors.It thinks that if the enterprises own these factors: the monopoly or comparative advantages, in the mature stage, brand strategy, the good political and economic environment, and the enterprises can choose the way of FDI. Otherwise the enterprises should choose the outsourcing way.