Sequence of FDI entry mode decision making process: new evidence from multinational pharmaceutical firms' FDI into China.ABSTRACT Based on Jiang's (2003) eclectic e·clec·tic adj. 1. Selecting or employing individual elements from a variety of sources, systems, or styles: an eclectic taste in music; an eclectic approach to managing the economy. 2. framework and the survey database established in 1999, this paper conducted a more refined comparative analysis into the sequence of FDI FDI See: Foreign direct investment entry mode decision making process in the context of international pharmaceutical firms' FDI entry mode decisions into China by categorising firms according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. different types of share of ownership, L e. firms with less than 50% share of ownership (Minority-JV), firms with equal share of ownership (Equal-JV), firms with greater than 50% share of ownership (Majority-JV), and firms with 100% share of ownership (SV) in their China ventures. The results suggested that joint venture (JV) differs significantly from sole venture (SV) entry mode, and three types of JV entry modes also differed substantially from each other, which suggested that it would be more appropriate to treat each type of JV entry modes as a real alternative for SV entry mode. 1. RESEARCH FOUNDATION Most past studies on foreign market entry modes have emphasised "market imperfection im·per·fec·tion n. 1. The quality or condition of being imperfect. 2. Something imperfect; a defect or flaw. See Synonyms at blemish. imperfection Noun 1. (ownership advantage) theory" (Hymer Hymer is a German motorhome manufacturer. They make all types of motorhome except for high-top and other van based vehicles. They are especially well known for their unique A-Class motorhomes, which often feature a drop down overhead luton bed, situated above the cab. , 1960 & 1976), "location specific advantage theory" (Franko Franko may refer to:
A decision by a brokerage to fill an order with the firm's own inventory of stock. Notes: When a brokerage receives an order they have numerous choices as to how it should be filled. theory" (McManus McManus is a family name that may refer to: People:
American writer and editor known especially for his caustic, polysyllabic wit. and Casson Cassons or Casson is the name of a Yokut Native American tribe in central eastern California. The Cassons are also called the Gashowu. The Casson Yokut territory extended from the eastern side of San Joaquin Valley floor eastward to the upper foothills, between the San , 1976), "transaction cost theory" (Williamson Wil·liam·son , Mount A peak, 4,382.9 m (14,370 ft) high, in the Sierra Nevada of east-central California. , 1975; Buckley and Casson, 1976; Casson, 1982; Caves The following is a partial list of caves. Africa Ethiopia
Main article: List of caves in South Africa
Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic and Gatignon, 1986; Erramilli and Rao RAO Retiree Activities Office RAO Right Anterior Oblique (Radiologic Term) RAO Retinal Artery Occlusion RAO Remedial Action Objective RAO Response Amplitude Operator (mechanical engineering) , 1993), "strategic behaviour approach" (Harrigan Harrigan may be: People:
A theory that provides a three-tiered framework for a company to follow when determining if it is beneficial to pursue direct foreign investment. Notes: " denoted that the choice of entry mode decision is influenced by three types of factors: ownership-specific factors of a firm, location-specific factors of a market and internalization advantages of integrating transactions within the firm. Hill, Hwang Hwang can refer to:
orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness (1990) developed their "eclectic theory of the foreign entry mode choice" by combining transaction cost theory, internalization theory and strategic behaviour approach. Bell (1996) created a new eclectic framework to exam Dutch firms' entry mode decision by adding resource based theory into Hill, Hwang and Kim's (1990) eclectic mode. Following Stopford and Wells's (1972) pioneering study on entry mode choice decision between SV and JV using the Harvard Harvard, town (1990 pop. 12,329), Worcester co., E central Mass.; inc. 1732. A Shaker house and cemetery, a Native American museum, and a Harvard observatory are there. Multinational Enterprise Database, a number of important empirical studies Empirical studies in social sciences are when the research ends are based on evidence and not just theory. This is done to comply with the scientific method that asserts the objective discovery of knowledge based on verifiable facts of evidence. have been conducted. These empirical studies revealed that the probability of setting up SVs is positively related to the level of the parent firms' international experience (Gatigon and Anderson, 1988; Erramilli, 1991; Agarwal and Ramaswami Ramaswami is an Indian surname. It may refer to:
The success of each foreign market entry is affected by many factors. Firms that want to invest in a foreign market need to consider the possible impacts of these factors (Bell 1996). Root (1994), and Mockler and Dolomite dolomite (dō`ləmīt', dŏl`ə–). 1 Mineral, calcium magnesium carbonate, CaMg (CO3)2. (1997) have elaborated on the factors affecting the decision choice of entry mode. They suggested that an initial concept of an entry mode can be determined by studying host country environmental, market, production, parent firm's home country, parent firm's product and resource commitment factors. However, Kumar and Subramanian (1997) deemed that the existing literature on the choice of entry modes into international markets is based on the assumption that the mode of entry choice is a function of various exogenous Exogenous Describes facts outside the control of the firm. Converse of endogenous. factors, but an alternate view could be that certain factors endogenous endogenous /en·dog·e·nous/ (en-doj´e-nus) produced within or caused by factors within the organism. en·dog·e·nous adj. 1. Originating or produced within an organism, tissue, or cell. to the decision task affect the choice of mode of entry. This view holds that a decision made by a manager depends not only on the relevant external factors but also on characteristics of the decision task, characteristics of the manager, and the manager's expectations about the quality of the information available to reach the decision as managers of multinational corporations
["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. when making the decision. Jiang's (2003) study, based on an eclectic mode by integrating Kumar and Subramania's (1997) contingency contingency n. an event that might not occur. model and Root's (1994) and Meckler and Dolomite's (1997) conventional model, into multinational pharmaceutical firms' FDI entry mode decision into China found that firms who chose a joint venture, two external factors appeared to be the major determinants of this choice, namely China environmental factors and the market factors. Whereas, in the case of the firms who chose a sole venture, an internal factor appeared to be the major determinant determinant, a polynomial expression that is inherent in the entries of a square matrix. The size n of the square matrix, as determined from the number of entries in any row or column, is called the order of the determinant. , namely parent firm's decision task related factors. However, the literature remains controversial in relation to the sequence of FDI entry mode decision making process. Bell (1996) suggested that Minority JV, Equal JV, Majority JV should not be treated as one group al an alternative to SV because they are genuinely different forms of organisation. This finding was in contrast with Gatignon and Anderson's (1988) two-stage approach where firms decide whether they choose a JV or not, if so, then firms would select a specific JV operation. This paper, based on Jiang's (2003) eclectic framework and the survey database established in 1999, conducted a more refined comparative analysis by categorising firms according to different types of share of ownership; i.e. firms with less than 50% share of ownership (Minority JV), firms with equal share of ownership (Equal JV), firms with greater than 50% share of ownership (Majority JV), and firms with 100% share of ownership (SV) in their China ventures. FIGURE 1 is an elaboration of the eclectic conceptual framework For the concept in aesthetics and art criticism, see . A conceptual framework is used in research to outline possible courses of action or to present a preferred approach to a system analysis project. (Jiang, 2003), which explains the hypotheses relationships between the choice of FDI entry modes and seven groups of independent variables. [FIGURE 1 OMITTED] The hypotheses are formally stated below: Hypothesis 1 (H1): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is negatively related to the importance of China's environmental factors. Hypothesis 2 (H2): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is negatively related to the importance of China's market factors. Hypothesis 3 (H3): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is negatively related to the importance of China's production factors. Hypothesis 4 (H4): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is positively related to the importance of the firm's home country factors. Hypothesis 5 (H5): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is positively related to the importance of the firm's product factors. Hypothesis 6 (H6): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is positively related to the importance of the firm's resource commitment factors. Hypothesis 7 (H7): The probability for a firm to choose an FDI entry mode with higher (or lower) level of share of foreign ownership is positively related to the importance of the firm's decision task factors. 2. RESEARCH METHODOLOGY 2.1 The Population and Sample A total of 117 foreign pharmaceutical firm invested pharmaceutical companies (IPFIPCs) in Mainland China during the period of 1980-1998 were defined as the population for the research. Over 84% of IPFIPCs were located in the east China's 13 provinces and municipalities where the economic development had been reached relatively more advanced level. Less than 16% of IPFIPCs were distributed in China's middle and west areas. A total of 98 IPFIPCs distributed in the three major regions in east China and which accounted for 83.76% of the population were defined as the sample size for this research. These IPFIPCs in the sample include 29 in South East Region (SER Ser serine. Ser abbr. serine SER smooth endoplasmic reticulum. Ser serine. ), 38 in Middle East Region (MER mer Among the Cheremi and Udmurt peoples of Russia, a sacred grove where people of several villages gathered periodically to hold religious festivals and sacrifice animals to nature gods. ) and 31 in North East Region (NER). The SER comprises of Guangdong and Fujian provinces. The MER covers Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. , Jiangsu, Anhui and Zhejiang provinces. The NER consists of Beijing and Tianjin municipalities, Liaoning, Shandong and Hebei provinces Noun 1. Hebei province - a populous province in northeastern China Hebei, Hopeh, Hopei Cathay, China, Communist China, mainland China, People's Republic of China, PRC, Red China - a communist nation that covers a vast territory in eastern Asia; the most . The companies in the sample in SER, MER and NER were centred on Guangdong, Shanghai and Beijing, respectively (CCPIE, 1995; NTDB NTDB National Trade Data Bank NTDB National Topographic Data Base (Canada) NTDB National Trauma Data Bank NTDB Thermodynamic Database of Nucleic Acids , 1996; MIMS MIMS Music Is My Savior (music album) MIMS Medical Information Management System MIMS Multimedia Integrated Modeling System (US EPA) MIMS Membrane Introduction Mass Spectrometry Asia, 1998, SPGC SPGC Strong Perfect Graph Conjecture (mathematics) SPGC South Pars Gas Complex (Iran) , 1999). 2.2 Data Collection A questionnaire was designed in both English and Chinese versions and was pre-tested with six pretesting respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. for the data collection. The research fieldwork field·work n. 1. A temporary military fortification erected in the field. 2. Work done or firsthand observations made in the field as opposed to that done or observed in a controlled environment. 3. was conducted in China between early April and late June in 1999. The data was collected through both personal interviews, and a mail questionnaire survey. Personal interviews were conducted with senior executives of foreign business partners in IPFIPCs in China, and the postal questionnaires were addressed to foreign general managers/representatives in IPFIPCs in China. In total 44 companies participated in this research, and 82% of answered questionnaires were obtained through personal interviews. Of the responding firms, 39 firms selected joint venture entry mode including 11 Minor-JVs, 7 Equal-JVs, and 21 Majority-JVs. The rest chose sole venture with 100% share of ownership. 3 companies including 2 in Guangdong and 1 in Jiangsu were found to have ceased operations during the fieldwork. Also 1 company in Guangdong had the foreign partner's share sold to its Chinese partner before this survey was conducted. Therefore the real sample size was reduced from an estimated 98 to 94 IPFIPCs, which means that a 46.81% response rate was achieved. 3. DATA ANALYSIS RESULTS 3.1 Variable Coding and Scale Reliability The dependent variable is FDI entry mode choice (3JVs and SV). Minor-JV, Equal-JV, Majority-JV and SV were coded as "1", "2", "3" and "4" respectively. The seven independent variables are China's environmental factors, China's market factors, China's production factors, Parent firm's home country/region factors, Parent firm's product factors, Parent firm's resource commitment factors and Parent firm's decision task related factors. Independent variables were measured at ordinal (mathematics) ordinal - An isomorphism class of well-ordered sets. level. The questions were designed using a 6-point Likert scale Likert scale A subjective scoring system that allows a person being surveyed to quantify likes and preferences on a 5-point scale, with 1 being the least important, relevant, interesting, most ho-hum, or other, and 5 being most excellent, yeehah important, etc , ranging from "1" not important to "6" very important for each of the seven groups of factors. Respondents were requested to indicate their perceptions of the degree of importance of the seven groups of factors to their parent firms' decisions in choosing an FDI entry mode for investing in China. The reliability of the scales was tested, and Cronbach's alpha Cronbach's  (alpha) has an important use as a measure of the reliability of a psychometric instrument. It was first named as alpha by Cronbach (1951), as he had intended to continue with further instruments. is used as the
indicator. The internal consistency In statistics and research, internal consistency is a measure based on the correlations between different items on the same test (or the same subscale on a larger test). It measures whether several items that propose to measure the same general construct produce similar scores. of the scale values for each one of
the seven groups of factors is found to be at an acceptable level. The
reliability coefficients (Alpha) for the seven groups of exploratory
variables were 0.80 for 'China environmental factors' (28
items), 0.78 for 'China market factors' (9 items), 0.76 for
'China production factors' (14 items), 0.87 for 'Parent
firm's home country/region factors' (6 items), 0.66 for
'Parent firm's product factors' (3 items), 0.70 for
'Parent firm's resource commitment factors' (13 items)
and 0.60 for 'Parent firm's decision task related
factors" (5 items). Two levels of analyses were performed by means
of multinominal logistic regression In statistics, logistic regression is a regression model for binomially distributed response/dependent variables. It is useful for modeling the probability of an event occurring as a function of other factors. analysis followed by ANOVA anovasee analysis of variance. ANOVA Analysis of variance, see there . Logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation regression regression, in psychology: see defense mechanism. regression In statistics, a process for determining a line or curve that best represents the general trend of a data set. was used to detect which group/(s) of factors contributed most to the FDI entry mode choice decision. Total scores for each of the seven groups of factors that were used for the logistic regression were calculated respectively by summing up all the original scores for each single factor in each one of respective seven groups of factors. 3.2 Multinominal Logistic Regression Analysis According to Gatignon & Anderson (1988) and Bell (1996), a more refined logistical regression analysis In statistics, a mathematical method of modeling the relationships among three or more variables. It is used to predict the value of one variable given the values of the others. For example, a model might estimate sales based on age and gender. was carried out to find the best model for describing whether and how the impact of the seven groups of factors differed for the four levels of share of ownership; i.e. Minority JV, Equal JV, Majority JV, and SV. The SV was taken as the reference category, so that the effects of the independent variables on the three types of JVs were interpreted as relative to SV. Analogous analogous /anal·o·gous/ (ah-nal´ah-gus) resembling or similar in some respects, as in function or appearance, but not in origin or development. a·nal·o·gous adj. to the binomial binomial (bī'nō`mēəl), polynomial expression (see polynomial) containing two terms, for example, x+y. The binomial theorem, or binomial formula, gives the expansion of the nth power of a binomial (x+ logistical model, the SV mode was taken as the base category, which implies that firms see the different types of JV as real alternatives for SV (Bell, 1996); i.e., when international pharmaceutical firms entering into China, firms were expected to make only one decision on entry mode that will be selected. The results of multinominal regression analysis are presented in TALBLE 1. A positive [beta] coefficient coefficient /co·ef·fi·cient/ (ko?ah-fish´int) 1. an expression of the change or effect produced by variation in certain factors, or of the ratio between two different quantities. 2. means an increased probability of the specific type of JV entry mode relative to a SV entry mode, and a negative [beta] coefficient means an increased probability of a SV entry mode. The results suggested that China environmental factors had a significant effect on the probability to choose a Minority JV ([beta]=0.3228; p<.05), an Equal JV ([beta]=.3320; p<.05), and a marginally significant effect on the probability to choose a Majority JV ([beta]=0.2408; p<.10) over a SV. These mean that when China's environmental factors become an important concern to international pharmaceutical firms' FDI entry mode decision into China, firms would be more likely to choose JV entry modes rather than a SV. The impacts of China environmental factors on firms towards choosing a Minority JV and an Equal JV were greater than that on firms towards choosing a Majority JV. Therefore, Hl was supported. An increased degree of importance of China market factors significantly increases the probability of Minority JV ([beta]=0.8756; p<.01) and Majority JV ([beta]=0.6558; p<.05) as opposed to SV. A marginal significant impact applies to Equal JV ([beta]=0.5992; p<.10). Investing firms prefer to choose JV entry modes for entering into the Chinese market when China's market factors was considered as the important parameter (1) Any value passed to a program by the user or by another program in order to customize the program for a particular purpose. A parameter may be anything; for example, a file name, a coordinate, a range of values, a money amount or a code of some kind. to their FDI entry mode decision. The impact of China market factors on firms towards choosing a Minority JV was greater than that on firms towards choosing a Majority JV, and even more so for choosing an Equal JV entry mode. H2 was supported by this finding. The results also show that when parent firm's decision task related factors become an important concern, SV is likely to be the preferred entry mode over an Equal JV ([beta] = -1.2128; p<.10) and a Majority JV ([beta]=-1.0485; p<.10). H7 was fairly supported by the finding. Statistically, there was not sufficient evidence to support hypotheses 3 to 6. The overall multinomial mul·ti·no·mi·al n. See polynomial. [multi- + (bi)nomial.] mul logistic regression model classified 72.7 percent of observations correctly. The -2 log was 65.9687 and the model Chi-square chi-square (ki´skwar) see under distribution and test. chi-square n. was 43.079 (with df=21) and was significant at .01 level (p=.0030), which indicates a good fit of the model. The results of multinomial logistic regression analyses based on four levels of share of ownership closely resembled those of the binomial logistic regression analysis base on JV and SV (Jiang, 2003). All variables that were significant in the binomial logistic regression analysis were also significant for most types of JV entry modes in the multinomial logistic regression analysis. The only exception was that the directions of effects of China's production factors on Minority JV and Majority JV, and the direction of effect of parent firm's home/country/region factors were not expected and were not consistent with those revealed from the binomial logistical regression analysis. However, as indicated earlier, the impact of these two groups of factors on international pharmaceutical firms' FDI entry mode choice were not significant. The multinomial logistic regression analysis also indicates that the effects of China environmental and market factors on international pharmaceutical firms' FDI entry mode decisions were substantially different among the different types of JV. Therefore the three types of JV should not be considered as one group of format of ventures. 3.3 ANOVA Results To scrutinise Verb 1. scrutinise - to look at critically or searchingly, or in minute detail; "he scrutinized his likeness in the mirror" scrutinize, size up, take stock the differences among Minority JV, Equal JV, Majority JV and SV, an ANOVA procedure was carried out to investigate significant variables that differentiated Minority JV, Equal JV, Majority JV and SV. Post-hoc comparisons using Tukey HSD HSD Human Services Department HSD High Speed Data HSD Hillsboro School District (Hillsboro, OR) HSD Hybrid Synergy Drive (Toyota/Lexus) HSD High School Diploma HSD Historical Society of Delaware test (when equal variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality within groups is assumed) and Games-Howell (when equal variance within groups is not assumed) were employed to investigate where the differences lie among the four groups of firms in scoring the seven groups of variables. The ANOVA results for significant variables are presented in TABLE 2 and TABLE 3. The ANOVA analyses have indicated that China's environmental variables including govemment policies and regulations, level of the Chinese government Ever since Republic of China founded in January 1st, 1912, China has had several regional and national governments. List
4. CONCLUSION AND DISCUSSIONS This paper examined the sequences of FDI entry mode decision making process in the context of the international pharmaceutical firms' investment in China. It suggested that the impacts of the significant variables on SV firms differed significantly from that on JV firms, and these results parallel those suggested by previously published results on the FDI entry mode choice between a SV and JV (Jiang, 2003). The three types of JVs also differed substantially from each other, which suggests that it would be more appropriate to treat the three different types of JV entry modes as real alternatives to the SV entry mode choice. This result was in a similar line with Bell's (1996) finding, but in contrast with Gatignon and Anderson's (1988) two-stage approach. The analyses have shown that China environmental and market factors were significant factors that affected international pharmaceutical firms' decisions in choosing an entry mode among Minority JV, Equal JV, Majority JV and SV options. When China's environmental factors became a significant concern to international pharmaceutical firms' FDI entry mode decisions, international pharmaceutical firms would be more likely to choose a JV entry mode with minority or equal share of ownership rather than a SV, and a JV with majority of share of ownership also seems to be preferable over a SV entry mode. When China's market factors became a significant concern to international pharmaceutical firms' FDI entry mode decisions, international pharmaceutical firms would be more likely to choose a JV entry mode with minority or majority share of ownership rather than a SV. A JV entry mode with equal share of ownership also appeared to be a preferable entry mode over a SV entry mode. On the other hand, SV seems likely to be a preferred entry mode over JV entry modes with equal JV or majority JV, when parent firm's decision task related factors became an important concern to international pharmaceutical firms' FDI entry mode decisions. This research also revealed that an entry mode with higher level share of ownership would be preferred when parent firm's resource commitment factors have significant impact on entry mode decisions. However, the application of the findings from this research may only be applicable to the certain industries as the population for this research was limited to the international pharmaceutical firms' FDI in China. Future research into other industries would be necessary for forming a more comprehensive theoretical basis on the sequence of FDI entry mode decision making processes.
TABLE 1: MULTINORMINAL LOGISTIC REGRESSION RESULTS
China China
Entry environmental market
Modes Intercept factors factors
Minority JV (n = 11)
[beta] -15.0264 0.3228 0.8756
S.E. 22.7101 0.1399 0.3334
Sig. .5082 .0211 * .0086 **
Equal JV (n = 7)
[beta] -13.8224 0.3320 0.5992
S.E. 22.8374 0.1401 0.3139
Sig. .5450 .0178 * .0563 ([dagger])
Majority JV (n = 21)
[beta] -8.8520 0.2408 0.6558
S.E. 19.2998 0.1294 0.2950
Sig. .6465 .0627 ([dagger]) .0262 *
SV (n = 5) 0 0 0
Parent firm's
China home country/ Parent firm's
Entry production region product
Modes factors factors factors
Minority JV (n = 11)
[beta] -0.1106 0.1089 -0.1642
S.E. 0.2421 0.2870 0.8165
Sig. .6478 .7044 .8406
Equal JV (n = 7)
[beta] 0.1099 0.1238 -0.1531
S.E. 0.2358 0.2840 0.8289
Sig. .6410 .6629 .8535
Majority JV (n = 21)
[beta] -0.0104 -0.0344 -0.1632
S.E. 0.2116 0.2668 0.7391
Sig. .9607 .8975 .8252
SV (n = 5) 0 0 0
Parent firm's Parent firm's
resource decision task
Entry commitment related
Modes factors factors
Minority JV
[beta] -0.5491 -0.8684
S.E. 0.3817 0.6406
Sig. .1502 .1752
Equal JV (n = 7)
[beta] -0.3731 -1.2128
S.E. 0.3915 0.6312
Sig. .3406 .0547 ([dagger])
Majority JV (n =21)
[beta] -0.2465 -1.0485
S.E. 0.3562 0.5953
Sig. .4889 .0782 ([dagger])
SV (n = 5) 0 0
([dagger]): p < .10; *: p < .05; **: p < .01; ***: p < .001.
A positive [beta] coefficient means an increased probability of the
specific type of JV relative to a SV.
A negative [beta] coefficient means an increased probability of a SV.
TABLE 2: MEANS AND STANDARD DEVIATION FOR SIGNIFICANT VARIABLES (ANOVA
ANALYSIS)
Sample Mean (Standard Deviation)
Mean
(Standard Minority-JV Equal-JV
Variables Deviation) (N=11) (N=7)
China Environmental Factors:
Government policies and 4.95 5.36 5.29
regulations (0.83) (0.67) (0.76)
Level of the Chinese 4.59 4.82 4.86
government to deal with (1.02) (0.60) (0.69)
Role of the Chinese 5.11 5.64 5.57
government in the economy (0.89) (0.50) (0.53)
The status of economic 3.86 4.55 4.29
co-operation between China and (1.00) (0.69) (0.76)
parent firm's country/region
Chinese people's way of life 4.09 4.55 4.43
(0.77) (0.52) (0.53)
Way of doing business in China 5.11 5.64 5.86
(0.95) (0.50) (0.38)
Availability of infrastructure 4.14 4.82 4.29
(1.11) (0.87) (0.95)
Quality of infrastructure 4.30 5.36 4.43
(1.09) (0.50) (0.98)
Geographic proximity distance 2.80 2.73 3.71
between China and your parent (0.79) (0.79) (0.76)
firm's country/region
China Market Factors:
Availability of marketing 4.93 5.55 5.14
infrastructure (0.87) (0.52) (0.69)
Quality of distribution 4.52 5.18 4.43
infrastructure (1.00) (0.60) (0.98)
Required cost of marketing 4.39 4.73 4.00
effort (0.92) (0.79) (0.82)
Parents Firm's Resource
Commitment Factors:
Production skills 4.14 3.45 4.00
(0.73) (0.52) (0.58)
Management capacity 4.25 3.73 4.14
(0.72) (0.79) (0.69)
Mean (Standard
Deviation)
Majority-JV SV
Variables (n=21) (n=5)
China Environmental Factors:
Government policies and 4.86 4.00
regulations (0.73) (1.00)
Level of the Chinese 4.86 2.60
government to deal with (0.73) (1.14)
Role of the Chinese 4.95 4.00
government in the economy (0.92) (0.71)
The status of economic 3.48 3.40
co-operation between China and (0.98) (1.14)
parent firm's country/region
Chinese people's way of life 3.71 4.20
(0.78) (0.84)
Way of doing business in China 4.76 4.40
(1.00) (0.89)
Availability of infrastructure 4.10 2.60
(1.00) (0.89)
Quality of infrastructure 4.05 2.80
(0.86) (0.84)
Geographic proximity distance 2.52 2.80
between China and your parent (0.60) (0.84)
firm's country/region
China Market Factors:
Availability of marketing 4.76 4.00
infrastructure (0.83) (1.00)
Quality of distribution 4.48 3.40
infrastructure (0.93) (1.14)
Required cost of marketing 4.67 3.00
effort (0.80) (0.00)
Parents Firm's Resource
Commitment Factors:
Production skills 4.38 4.80
(0.59) (0.84)
Management capacity 4.52 4.40
(0.60) (0.55)
TABLE 3: ANOVA RESULTS FOR SIGNIFICANT VARIABLES
Variables F (3,40) p-value [[eta].sup.2]
China Environmental Factors:
Government policies and 4.3584 .0096 0.25
regulations
Level of the Chinese 13.3970 .0000 0.50
government to deal with
Role of Chinese government in 6.4447 .0012 0.33
the economy
The status of economic co- 4.3312 .0098 0.25
operation between China and
parent firm's country/region
Chinese people's way of life 4.1713 .0116 0.24
Way of doing business in China 6.0678 .0017 0.31
Availability of infrastructure 6.3230 .0013 0.32
Quality of infrastructure 12.8899 .0000 0.49
Geographic proximity, distance 5.0966 .0044 0.28
between China & your parent
firm's country/region
China Market Factors:
Availability of marketing 5.3584 .0034 0.29
infrastructure
Quality of distribution 3.2502 .0316 0.20
infrastructure
Required cost of marketing 5.3584 .0003 0.37
effort
Parents Firm's Resource
Commitment Factors:
Production skills 8.0132 .0003 0.38
Management capacity 3.6413 .0206 0.21
Post-hoc Test (Significant Level)
Minority Minority Minority
vs. vs. vs.
Variables Equal JV Majority JV SV
China Environmental Factors:
Government policies and n.s. n.s. **
regulations
Level of the Chinese n.s. n.s. ***
government to deal with
Role of Chinese government in n.s. ([dagger]) **
the economy
The status of economic co- n.s. * n.s.
operation between China and
parent firm's country/region
Chinese people's way of life n.s. * n.s.
Way of doing business in China n.s. * *
Availability of infrastructure n.s. n.s. ***
Quality of infrastructure ([dagger]) *** ***
Geographic proximity, distance * n.s. n.s.
between China & your parent
firm's country/region
China Market Factors:
Availability of marketing n.s. * **
infrastructure
Quality of distribution n.s. n.s. **
infrastructure
Required cost of marketing n.s. n.s. ***
effort
Parents Firm's Resource
Commitment Factors:
Production skills n.s. ** **
Management capacity n.s. * n.s.
Post-hoc Test (Significant Level)
Equal JV Equal JV Majority JV
vs. vs. vs.
Variables Majority JV SV SV
China Environmental Factors:
Government policies and n.s. * n.s.
regulations
Level of the Chinese n.s. *** ***
government to deal with
Role of Chinese government in n.s. ** ([dagger])
the economy
The status of economic co- n.s. n.s. n.s.
operation between China and
parent firm's country/region
Chinese people's way of life n.s. n.s. n.s.
Way of doing business in China * * n.s.
Availability of infrastructure n.s. * *
Quality of infrastructure n.s. ** *
Geographic proximity, distance ** n.s. n.s.
between China & your parent
firm's country/region
China Market Factors:
Availability of marketing n.s. ([dagger]) n.s.
infrastructure
Quality of distribution n.s. n.s. ([dagger])
infrastructure
Required cost of marketing n.s. ([dagger]) ***
effort
Parents Firm's Resource
Commitment Factors:
Production skills n.s. n.s. n.s.
Management capacity n.s. n.s. n.s.
n.s.: not significant; ([dagger]): p < .10, *: p < 05; **: p < .01;
***: p < .001.
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Root, F.R., Entry Strategies for International Markets, Lexington Books, San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , 1994. SPGC (Shanghai Pharmaceutical Group Corporation), Shanghai, 1999. Stopford, J.M. and Wells, L.T. Jr., Managing the MNE: Organisation of the Firm and Ownership of the Subsidiaries, Basic Books, New York, 1972. Wernerfelt, B, "A Resource-based View of the Firm", Strategic Management Journal Vol.5, 1984, 171-180. Williamson, O.E., Markets and Hierarchies, The Free Press, New York, 1975. Author Profile Dr. JIANG Fuming fuming /fum·ing/ (fum´ing) emitting a visible vapor. fum·ing adj. Producing or emitting smoke or vapor, as for certain concentrated nitric, sulfuric, and hydrochloric acids. earned his Ph.D. at The Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. Graduate School of Entrepreneurship en·tre·pre·neur n. A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake; see enterprise. , Swinburne. Currently he is a researcher, lecturer lecturer A person who is primarily–if not entirely—involved in the teaching activities of an academic center, who is not expected to perform research or Pt management; in general, lectureships are non-tenured positions and course coordinator in international business in The School of Business and Information Management at The Australian National University Australian National University, located in Canberra and state-sponsored, founded 1946 as Australia's only completely research-oriented university. Originally limited to graduate studies, it expanded in 1960, merging with Canberra University College (est. 1929). , Australia. |
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