Research On Nonequity Modes Of Chinese Private Enterprises

Non-equity participation is becoming more and more important in international production and investment in recent years, multinational companies have begun to establish a set of global interdependent value chain network including branches of home country and host country partners to externalize their business activities.With continuous increasing of integration between overall economic strength and the world economy, China has ranked among the world’s three largest foreign investment countries nowadays, and Chinese private enterprises have possessed the mature conditions of transnational investment no matter from development scale, economic strength, market demand and the policy support. Chinese private enterprises can not only expand the foreign market but also create long-term economic benefits through Non-equity participation. In view of the new development of international investment situation and the new requirements of Chinese foreign investment practice, the research on Non-equity participation of Chinese private enterprises has a double meaning of theory and practice.This paper stands from the perspective of investment benefit of Chinese private enterprises and positioning analyzes how to choose the suitable Non-equity modes for their own development in the premise of benefit maximization or cost minimization, as well as the affecting factors and application strategy.First of all, we reviewed related theory and related research of transnational investment and Non-equity participation of private enterprises, respectively defined the Non-equity participation and private enterprises to specific the research topic;Secondly, we analyzed the current situation of Non-equity participation of Chinese private enterprises from existing problems, comparative advantages, development trend; Then we made a comparative analysis of Non-equity modes including contract manufacturing organization, service outsourcing, contract farming, franchising, license contract, contract management application in Chinese private enterprises, and explored the inherent characteristics and applied conditions of different modes;After, we summarized relevant factors affecting Non-equity modes selection of Chinese private enterprises and conducted the empirical analysis, hierarchical analysis of macro factors and principal component analysis of micro factors to determine the influence and correlation; Next, according to the empirical analysis results we put forward principles and methods about Non-equity modes selection from the perspective of risk、cost and benefit, and constructed a selection framework; Finally, we put forward corresponding suggestions to Non-equity modes selection of Chinese private enterprises based on the countermeasure analysis.The conclusion of our study is: Non-equity modes selection of Chinese private enterprises should combine related factors of enterprise level, environment level and industry level to make a strategic behavior analysis of the primary modes, exclude high-risk modes at first; then make a economic benefit analysis of the remaining modes on the premise of benefit maximization assisted by cost minimization to determine the final Non-equity modes.