Market-entry Strategies Of MNEs Under Place-based Policy Incentives

Place-based policy generally refers to the policy that the government sets up incentive conditions in the designated location to attract and guide the investment behavior of enterprises,and the SEZ is a typical place-based policy.From 1978 to2018,China’s place-based policy,as an important achievement of the reform and opening-up that spans 40 years,fully reflects the historical achievements of the place-based policy construction from SEZs to various SEZs.In recent years,the global emerging market countries show the spectacular situation of economic rise,which is difficult to be explained by the traditional international business theory and practical experience.This has aroused extensive attention in the academic circle.As a representative country of emerging markets,China has attracted a large number of MNEs to enter the Chinese market and a large number of excellent Chinese companies to go global under the guidance of place-based policy since the reform and opening-up 40 years ago.This thesis focuses on the MNEs in the course of reform and opening up in China market-entry strategy,in-depth study place-based policy for MNEs in China market-entry theory system and effect mechanism,using a large amount of statistical data scientifically reveals the essence of the regional oriented policy characteristics and operation rules,as well as MNEs in policy driven strategy path.It has important theoretical and practical significance for promoting the reform and optimization of China’s place-based policy and promoting the strategic upgrading of MNEs’ market-entry.This thesis focuses on the perspective of host country and home country,introduces place-based policy,integrates and improves the strategic tripod analysis framework,and proposes a comprehensive theoretical analysis framework that place-based policy drives industrial layout,resource-allocation,and institution reform,and then influences the market-entry strategy of MNEs.In the theoretical paradigm that determines the strategic relationship between China’s place-based policy and MNEs’ market-entry,institutions play a key role,which not only determines the development trend of place-based policy,but also drives the formation of place-based policy influencing mechanism from the industrial base and resource base.In the end,it has a vital impact on the investment strategy of MNEs in China and the entry of Chinese MNEs into the overseas market.Based on the general strategic tripod after the introduction of place-based policy,this thesis constructs a set of systematic theoretical framework,which takes institution as the core,resources and industries as the support,and policy as the guidance,and ultimately drives the market of MNEs to enter the strategic development,laying a research foundation for the whole thesis.Based on the improved strategic tripod theoretical framework,this thesis puts forward the theoretical path and mechanism of place-based policy influencing MNEs’ market-entry strategy according to the three main dimensions of government place-based policy.According to this theoretical path,this thesis explores the reform and optimization direction of place-based policy in the context of China.On the basis of in-depth analysis of the theoretical mechanism of market-entry of MNEs under place-based policy,the theoretical hypothesis of market-entry of MNEs is empirically tested from the perspective of host country and home country respectively.This thesis realizes the organic integration of theoretical discussion,case analysis and empirical data,and puts forward relevant policy suggestions to optimize place-based policy,promote the investment of MNEs in China,and promote the entry of Chinese enterprises into overseas markets.This thesis focuses on the analysis of the influence of place-based policy on MNEs’ market-entry strategies,and studies the decision-making basis of MNEs’ market-entry from the micro level from the perspective of government-oriented policy.Through the combination of theoretical research,case analysis and empirical test,this thesis tries to form characteristics and innovations in the following aspects:(1)it innovatively constructs a comprehensive theoretical analysis framework of systematic research on the influence of place-based policy on institution quality upgrading on the market-entry strategy of MNEs;(2)It innovatively and systematically analyzes the mechanism of place-based policy affecting MNEs’ market-entry strategies,which provides a theoretical basis for exploring the process of MNEs’ market-entry;(3)Innovatively put forward the research hypothesis through the case practice analysis and tested the hypothesis through empirical analysis.Combined with the theoretical analysis and comprehensive model,it provides the theoretical basis and practical direction for the in-depth reform,optimization and promotion of the place-based policy of the Chinese government.This thesis is divided into eight chapters,and the analysis is carried out in accordance with the sequence of "literature review-theoretical analysis-Case analysis-Empirical test-policy suggestions".It not only reveals the theoretical system and mechanism of the place-based government policy driving institution quality upgrading and then influencing the market-entry strategy of MNEs.It also provides empirical evidence for the influence of place-based policy on MNEs’ market-entry strategies from an empirical perspective,and finally provides policy suggestions for deepening the reform and development of place-based policy in China.The work and contributions of this thesis mainly include the following aspects:Firstly,this thesis systematically reviews the literature on place-based policy,market-entry strategies of MNEs,internationalization of emerging market firms and overseas market-entry strategies of Chinese MNEs,and explores the theoretical boundaries of relevant research on market-entry strategies of MNEs.Based on the in-depth analysis of institution quality upgrading in the development of place-based policy,this thesis summarizes the roles played by the government and the market in the market-entry of MNEs under place-based policy,laying a foundation for analyzing the influence of government-oriented policy on the market-entry of MNEs.After combing and analyzing the theoretical basis of institution change and new economic institution theory,this thesis finds that by integrating the theoretical analysis framework after place-based policy,taking institution as the decisive factor of endogenous variables of the system,based on the three dimensions of institution quality and reform,industrial layout and optimization,and proprietary resources and capability orientation,It can analyze the formation of MNEs’ market-entry strategy and maintain or improve the performance of the theoretical mechanism.In discussing the market-entry strategies of MNEs,considering that place-based policy covers a wide range of issues,including various types of regional planning strategies,regional development policy and various types of SEZs,etc.,This thesis finds that research with broad and general carriers can more comprehensively and feasible sum up the general law of place-based policy impact on MNEs’ marketentry and put forward general policy recommendations that can be promoted.Therefore,this thesis finally focuses on high-tech industrial SEZs and economic and technological SEZs,which are the most representative "test fields" of reform and opening up with a large number of samples.It takes macro place-based policy as the background and takes micro fine case analysis and SEZs data as empirical support.The thesis studies the macro policy reform and development path and the micro theoretical mechanism and practical experience of the market-entry of MNEs.On the whole,under the guidance of the place-based policy of the government and from different perspectives of the host country and the home country,the theoretical system to study the market-entry strategy of MNEs is still a key issue to be explored urgently,which has important theoretical value and guiding significance to promote China to attract foreign capital to China and promote the overseas investment of local enterprises.Secondly,based on the analysis framework of the introduction of place-based policy strategy tripod,this thesis establishes three theoretical models of influencing the market-entry of MNEs,namely,industrial development layout-oriented policy,centralized resource-allocation oriented policy,and institution quality upgradeoriented policy,and puts forward research hypotheses based on case analysis.The first is to explore the theoretical mechanism of industrial layout-oriented policy driving the market-entry of MNEs.Industrial development layout-oriented policy gives high and new technology industrial SEZs and economic and technological SEZs,SEZs government level leading industry development planning the layout of the status symbol,top-level design to the central government and local government adjust measures to local conditions to design two kinds of pattern formation of longterm development planning,and through the good design and development of the industry chain of comparative advantage to produce spatial spillover effect;The reform and opening up model,in which the rich first lead the rich later,has effectively raised the operating level and standards of the industry and provided a new pole of economic growth for the country and the region.At the same time,the successful experience of the reform of experimental plots has formed a basis for promotion,which provides practical experience reference for optimizing existing SEZs and creating more high-quality SEZs innovatively,forming a virtuous cycle mechanism.The second is the theoretical mechanism that the centralized resourceallocation-oriented policy drives the market-entry of MNEs.Centralized resourceallocation orientation provides a wide range of channels to meet the needs of resource-allocation in the development area.Endogenous active service of form a complete set,the productive service supporting and surrounding human resources,financial supporting from MNEs in the SEZs’ everyday quality of life,together sharing platform and production supporting service facilities,scientific research and matching high-end management personnel and skilled technical workers and convenient financial services system and the policy of MNEs to form the multichannel allocation of resources and support,build around the SEZs’ resources development ecology.The third is the theoretical mechanism that institution quality upgrade-oriented policy drives the market-entry of MNEs.The institution quality upgrade-oriented policy enables governments at all levels to design the institution according to local characteristics and in accordance with the characteristics of local industries and resource endowments for MNEs entering the market.On the basis of China’s imperfect institution as a whole,it has formed partial excellent institution conditions,reduced the uncertainty of MNEs’ market-entry and formal and informal institution barriers,and formed a trial-and-error and promotion mechanism,which provides practical experience reference for China’s overall institution reform from point to aspect.Finally,based on the improved strategic tripod theoretical analysis framework combined with case analysis,the research hypothesis of this thesis is proposed.Under the background of international place-based policy practice and domestic place-based policy institution,this thesis interviews and analyzes Chengdu economic and technological development zone by means of case study.Combined with the improved strategic tripod theoretical analysis framework and practical experience,the first-hand information obtained by relevant government managers and representative managers of MNEs,and the feedback,problems and suggestions of both sides are collected to obtain first-hand data and evidence.In addition,practice feeds theory,and the interview content is used to analyze and refine the mechanism of place-based policy affecting the market-entry of MNEs,as well as summarize the advantages and disadvantages.This thesis makes a detailed case study on the specific practice of place-based policy driving the market-entry strategy of MNEs,and focuses on the operation and management strategy of MNEs,and puts forward the theoretical hypothesis of the mechanism of place-based policy determining the market-entry strategy of MNEs.Thirdly,under the framework of the improved strategic tripod theory,this thesis empirically analyzes the impact of place-based policy on MNEs’ market-entry strategies by using enterprise and county-level statistical data.On one hand,from the perspective of host country,this thesis empirically analyzes the effect mechanism of China’s place-based policy on MNEs’ marketentry.One is by choosing 1998-2013 within the catalog of Chinese SEZs should all SEZs and the National Bureau of Statistics of China industrial enterprise database including enterprises above designated size as the research object,by area county set up SEZs as the breakthrough point,whether DID method is used for the SEZs in a multinational company market access to the number for the calculation.Furthermore,the thesis empirically examines the effect mechanism of place-based policy on MNEs’ market-entry strategy.At the same time,parallel trend test and placebo test were conducted to ensure the validity of research conclusions.According to the definition of market-entry of MNEs,type and administrative level of SEZs,special year of establishment of SEZs,marketization degree of the region where SEZs are located and industrial contract strength.This thesis examines the influence of different factors on the different paths of MNEs’ market-entry strategies in the context of China.Empirical test shows that emerging economies can implement place-based policy to build SEZs to improve the institution environment,and promote the market-entry of MNEs by improving the quality of local institutions,so as to promote economic development and get rid of the poverty trap in emerging economies.This reveals the mechanism by which place-based policy influence MNEs’ market-entry strategies,and also provides a new solution for emerging economies to get rid of poverty trapOn the other hand,from the perspective of home country,this thesis empirically analyzes the differential impact of place-based policy on the overseas market-entry strategies of Chinese MNEs.Based on the Directory of China’s Overseas Investment Enterprises(Institutions)published by the Ministry of Commerce and The Database of China’s Industrial Enterprises by the National Bureau of Statistics.The names,host countries,investment objectives,basic information of enterprises,financial information and product information of domestic investors in China from 1998 to2013 were selected to identify the overseas market-entry behaviors of Chinese MNEs.DID method is used to estimate the number of Chinese MNEs entering overseas market in each SEZs.At the same time,according to the heterogeneity of SEZs level,enterprise life cycle,city level,eastern,central and western economic regions,market and government efficiency,industry,industry factor density,market-entry investment motivation,income level and institution quality,Through parallel trend test,placebo test,propensity score matching and other methods,this thesis empirically examines the differentiation mechanism of place-based policy on Chinese MNEs’ overseas market-entry from the perspective of home country,providing empirical evidence and theoretical support for Chinese MNEs’ overseas expansion strategy in the context of China.The empirical results show that placebased policy can not only promote the entry of Chinese MNEs into overseas markets,especially in developed host countries,but also enable Chinese MNEs in the region to participate in more investment projects,especially in the start-up and growth stages.SEZs can work in concert with the efficient market environment of major cities,eastern and central cities,while compensating for the inefficiency of government;In terms of different industries and types of enterprises,high-tech industries,technology-intensive industries,production-seeking enterprises and technology-seeking enterprises will be promoted more obviously.In addition,national SEZs have greater influence,which provides relevant empirical evidence for the optimization and reform of place-based policy and the entry of Chinese MNEs into overseas markets.Finally,based on theoretical analysis and case interviews,combined with empirical research,this thesis puts forward relevant policy suggestions for optimizing and reforming China’s place-based policy according to the actual situation of the entry of MNEs into China’s market and the entry of Chinese MNEs into overseas markets under the Chinese scenario: One is to create a fair and wellorganized market environment and systematically remove hidden barriers to market competition,such as the elimination of discriminatory barriers to private enterprises;Establishing laws and regulations that are not lower than international standards,such as strengthening intellectual property protection;To facilitate the movement of labor,technology and capital within the SEZs.For example,to promote the reform of the financial system in SEZs.Second,the government should pay attention to the "quality" of SEZs,rather than blindly pursuing the "quantity" of SEZs,so as to meet their competitive promotion mechanism.Both national and local governments should establish stricter approval procedures for the establishment of SEZs to ensure that the establishment of SEZs meets local development needs and promote the optimization of SEZs,especially at the provincial level.In order to make the SEZs fully play its role,the local government needs to establish a more perfect market economy system to avoid the misallocation of resources in the SEZs caused by the local officials’ inability to effectively identify the incentive objects,so that the SEZs policy can truly stimulate the enterprises in need.Third,for enterprises in the SEZs,local governments can provide more policy support and protection to help them overcome the high cost of going to countries with low income and low institution quality,so that enterprises can better enter these markets,exploit cheap production factors,and effectively integrate the global industrial chain.