The Research On The Formation Of The Different Type Of International Direct Investment

By establishing a model, this thesis studies the formation of the different type of international direct investment (FDI). Different from other scholars' research, in the model, this thesis discusses how multinational corporations (MNCs) make a choice between Greenfield investment and cross-border M&A when they face three typical market structures namely competition, monopoly and duopoly respectively, which makes the analysis more complete. Another characteristics of the model is that it features two special variables, namely cooperation coefficient, which reflects the effect of cooperation in the M&A, and the time for construction in the Greenfield investment. So the impact of the cooperation risk and competition on the formation of FDI can be better reflected on the model. After the analysis, the model is concluded with its economic implications with more realistic significance.Then, the thesis explains the transition from Greenfield investment to cross-border M&A in the formation of FDI, and the fact that MNCs enter the Chinese market usually by means of Greenfield investment after the implementation of China's reform and open-up policy. On the basis of the explanation, this thesis analyses the trend of the change in the industry distribution of FDI flowing into China and puts forward some suggestions on how to promote cross-border M&A in future.The structure of the thesis is as follows: Chapter One, a comprehensive review relevant to the entry mode of MNCs; Chapter Two, the model; Chapter Three and Chapter Four, the explanation of the transition in the formation of FDI and the fact in China; then, the end.