Entry Modes And Performance: Taiwanese Firms in China

• Main Authors: Tz-Rung Chen, 陳姿蓉
• Other Authors: Shan-Ying Chu
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/28813034411045623709

碩士 === 中原大學 === 國際貿易研究所 === 98 === The major purpose of this study is to investigate the factors that affect firms’ decision of entry modes among Taiwanese firms when entering China. We examine whether firms’ performance is influenced by the choice of modes. Furthermore, we test the endogenity problem of entry modes. Data are drawn from the Taiwanese firms that invest in China from 1999 to 2008. We use probit regression model and logistic regression model to examine how firm factors, host country factors, and industry factors affect firms’ decision of entry modes. The empirical evidence shows that in respect of the firm factors, firms that possess more international experience or invest more tend to prefer the mode of wholly owning. In respect of host country factors, firms that are located at a special economic zone are more likely to choose the mode of wholly owning. However, when facing high production costs and high environmental uncertainty, the mode of joint ventures is likely to be chosen. In respect of industry factors, in high concentrated and high asset-intensity industries, firms prefer the mode of joint ventures. However, in a high-growth industry, the mode of wholly owning is chosen. Firms choose the optimal entry mode to maximize profits. This study adopts a panel data regression model to examine whether firms’ performance is affected by the entry mode choices. Performance is measured by the net incomes and returns on asset. The empirical evidence shows that, during 1999-2008, the mode of wholly owning produces more net incomes than the mode of joint venture. During 2006-2008, relative to the mode of wholly owning and joint venture, the mode of exports performs better in terms of returns on asset.