Multinational Operation Theory And Strategy For Enterprises In Less-developed Regions: The Case Of West China

Classical international direct investment theories, which emphasize particularly on the study of static, absolute and monopoly advantages of developed countries, bear the difficulty to explain and instruct the foreign direct investment (FDI) of developing countries and less-developed regions. This paper, taking the cases of West China for positive analysis and applied study, studies the dynamic variation of production factor value according to different economy stages and regional spaces, as well as the transnational learning-oriented investment of less-developed regions, and establishes the theory of dynamic advantage. The issues in this paper are also among the front tasks of China National Tenth Five-Year Management Science Research.Various academic areas are involved in the study, including regional economics, industrial organization, development economics, investment economics, international trade, resource endowments, etc. Varying from mid-cosm to microcosm, static to dynamics, this paper has a rather wide academic investigation. Properly applying the mathematical tools as nonlinear functions, complex functions, field theory, entropy theory and dissipativity structure theory, the paper establishes a multiple production factors' variation model of dynamic value, location value and combined value, reveals the rule that factors of multinational operation varies to economy stages, regions and their combination, thus result in the variation of factor's usage value. The research in these areas strives to push the dynamic study of multinational operation to a higher level. The paper is divided into three sections and totally ten chapters.Section 1: Questions - the evaluation of theories. In this section, the author analyzes the unbalance of the inflow and outflow FDI in West China, according to both deposit and flux volume. The trade term of less-developed regions will deteriorate if these regions enter into the international specialization with labor-extensive and resource-extensive primary products for the long time.Section 2: Deduction and Verification - the expansion of theories. The author puts forward hypotheses of dynamic variation of production factors' time value, location value and their combined value, then makes the logic positive analysis by creating mathematical models and applies typical cases and data to verify these hypotheses. With the verified conclusions, the paper analyzes the reverse possibility between advantage and disadvantage resulting from the dynamic variation of the factor usage value. That the advantage is dynamic means that a disadvantage in one space and time can change into an advantage in another space and time; that the advantage is specified means that the total disadvantage does not mean the specified link disadvantage; that the advantage is comparative means that a disadvantage to A is not equal to a disadvantage to B. Enterprises in less-developed areas can undertake multinational operation with the dynamic, specified and comparative advantages. The transnational learning-oriented investment, though lacking in advantages, is more important for industry upgrade and development in the wake of other regions for less-developed regions. The paper also points out the strategies of taking transnational learning-oriented investment for enterprises in less-developed regions.Section 3: Strategies-analysis of application. Applying the expanded theories, the paper establishes sorted optional models or paths for comparative advantage, dynamic advantage and specified advantage of enterprises in less-developed areas, puts forward the multinational operation strategy for enterprises in less-developed regions, that is-corresponding to the dynamic and specified advantages of enterprises in less-developed regions, decompounding the value chain according to the enterprise strategic links thus choose a vertical entry strategy; corresponding to the comparative and dynamic advantages, creating a new value chain according to the internal economics of scale thus choose a horizontal entry strategy...