Study Of Political Embeddedness Of Local Firms And MNEs Entry Mode

With the globalization of world economy,more and more Chinese MNEs have begun their multinational marketing operations;foreign market entry mode selection has become an important problem of Chinese MNEs.This paper based on embeddedness theory,use both entry mode theory and liability of foreignness theory,trying to figure out how political embeddedness in host country market will influence the entry mode decision-making of MNEs.And taking account into the real situation of China,we rest the interaction effect of home country government ownership and MNEs international business experience on relationship between political embeddedness and entry mode.Based on the empirical results,this paper argues that the higher the degree of political embeddedness of local companies,the more likely MNEs will not choose the wholly-owned subsidiaries;The higher the degree of political institution embeddedness of local companies,the more likely the MNEs will not choose an wholly-owned subsidiaries;The higher the degree of political resources embeddedness of local companies,the more likely the MNEs will not choose an wholly-owned subsidiaries;.The higher the degree of political actors embeddedness of local companies,the more likely the MNEs will not choose an wholly-owned subsidiaries;And MNEs with home country government ownership will get additional support like finance and specific resources and sensitive information from home country government,so they are less sensitive of potential risks in host country markets;will accordingly reduce the influence of political embeddedness on entry mode decision-making.But for MNEs international experience,there is no evidence for how it will have influence on relationship between political embeddedness and entry mode.