The Research On The Choice Of FDI Modes Of Chinese Enterprises

With the development of the economy globalization,global FDI is developing rapidly.FDI has becoming the important way by which national enterprises enhance their international competitiveness and advance in the world economy.FDI could be divided into two broad categories:Green-field investment and cross-board M&A.From enquiry structure,they are joint ventures and wholly owned subsidiary.Different FDI modes mean achieving different benefits and risk from international market,so the choice of FDI modes is one of the most important decision in the process of enterprise internationalization.This thesis discusses the choice between green-field and cross-board M&A mainly.Nowadays,cross-board M&A has substituted for green-field investment in the world;while green-field is primary in China,and cross-board M&A is increasing gradually.Different FDI modes have different characters,and the choice will be influented by both external and internal factors.The paper attempts to do some research on the choice of FDI modes of Chinese enterprises.It absorbes the idea of profit maximization in theory,as well as empritical reseach about factors for choice,then collects the data of Chinese enterprises,and chooses five main factors which are regarded as the basic elements for choice of FDI modes.They are the technique of company,the scale of company,integration of company,system element and economic factors of host country.Then the thesis inspects the influence on choice by binary choice model.The result shows that the technique of company,integration of company,system element and economic factors have dramatically effect on the choice of FDI modes of Chinese enterprises.Chinese enterprises could choose M&A into some area where are high economic freedom,comparatively relaxed system environment,and developed economic.On the contrary,green-field is better when the host contury has low economic freedom.So some advice about choice of FDI modes of Chinese enterprises are given in this thesis based on the study as that.