Direct Foreign Investment: A Research On Competitive Advantage Acquisition Of Multinational Business Operations

At the era of knowledge economy and globalization, facing to the increasingly turbulent international market, competitive advantage turns into the focus of global TNCs. Most of Chinese enterprises are still lack of competitiveness on management skills, technology, famous brands as well as sales channels. It becomes an embrassing problem to those local firms that they do not know how to acquire competiveness, allocate and optimize the resources in a global market environment."Going global" is an important development strategy of China's progress of opening to the outside world. Driving capable Chinese firms "going global", is an important policy that Chinese government established. But actually the mainstram FDI theories can not give direction or support to the policy makers. The current theories exhibite impossibility of investment outward for firms of developing countries, and it leads to a conclusion that these firms has no chance to win in the furous market competition, which is contraversal to the actual cases in China and the other developing countries.Lacking of competitive advantages is not only the important factor that restricts Chinese firms "going global", but also obstructs the growing up of Chinese firms in the course of outward FDI. But meanwhile, by the driving force of economy globalization and the support of China's "going global" strategy, Chinese firms could just grasp and make use of the international and national chances, take outward FDI as an effective way and approach to strengthen technology advantage and core competitive power. The likely phenomena can be found at the early stage of developed countries. Chinese firms are supposed to abandon the mainstream FDI theories, renew their thoughts that outward FDI, especially invest in developed countries, is not only a course to use existing competitive advantages, but also a process to form new competitiveness. Going outward can rapidly improve firm's competiveness and shorten the competition gap. It expands firm's surviving and developmeng space in the global market. New theory on outward investment of developing country firms is needed to offer Chinese firms with valuable instructions and also enrich the FDI studies.Chapter 1 & 2 are the introduction and literature summary of the dissertation. They mainly present the background and significance of the research, then give the domestic and overseas literatures summary of the correlated researches, as well as the content structure and research method of the dissertation. The theory foundation and analytical framework are exhibited in Chapter 3. The FDI process and characteristics of both developed and developing country as well as some comparative examples are analyzed in Chapter 4. The fifth Chapter reviews the FDI activities of Chinese firms concretely. The sixth chapter constructs a theoretical framework, which includes dynamic and comparative static study of competitive advantage acquisition through outward FDI, the empirical research on Chinese, Japan and US firms outward FDI via statistics and econometrics methods are also conducted in this chapter. Based on the discussion, the seventh chapter gives the suggestions on the country strategy and firm strategy. And then is the summary of main conclusions and research outlook.The dissertation is on a solid base of developing country TNCs practice, especially those of Chinese firms. Although the prerequistes and conclusions of the mainstream FDI theory are abandoned, some models are well reviewed and further developed to be used in the analysis of this dissertation. The empirical studies also provide proven evidence on the dissertation's conclusion that developing country firms can improve competitiveness through outward FDI. The dissertation also constructs the strategy proposals for Chinese firms on the course of outward FDI.