Study On The Impact Of Barriers To Market Entry On The Investment Of Multinational Companies In China

This paper studies the effect of barriers to market entry on the investment of multinational companies in China. It discusses the types and characteristics of barriers to entry in Chinese market. There are three kinds of barriers to entry to the investment of foreigners, which are economic barriers to entry, legal barriers to entry and administrative barriers to entry. For the advantages owned by multinational companies, they can over easily the economic barriers to entry, whereas it is hard for them to overcome the legal barriers and administrative barriers.In the past time, Chinese government set so many limits to the investment of foreigners. Some of them made it impossible for Multinational companies to profit. This paper discussed the types and characters of barriers entry, theories about barriers to entry, factors of barriers to entry affecting the investment of multinational companies in China, and its impact on the multinational companies.This paper comes to the conclusion that barriers to entry suffered by the multinational companies investing in China come from policies and laws of the Chinese government to the foreign capital. Multinational companies can overcome easily the economic barriers through their internal advantages. But it is hard for them to overcome the administrative barriers and legal barriers. The two kinds of barriers affected the investment behavior of multinational companies on many aspects.Moreover, with the falling restriction of the Chinese market to the foreign investment, with softening of barriers to entry, the investment of multinational companies in China have been changing much, the area distribution will be more rationalization, investment manner will be diversity, and investment industries will be more widely and the scale of investment have been increasing greatly. Multinational companies think highly of Chinese market and their investment can also create more and more economic benefit to the region where they invested in.This paper uses qualitative analysis and quantitative analysis , through connecting theories with facts. During the process, I refer to a lot of law files and policy files about using foreign capital. I collect and use the relevant dates in this paper, and use some figures and tables to make the conclusion clearer.Innovation:1. New study point of view.Most of former study discussed barriers to entry of host country from point ofview of multinational companies, but this paper discusses the effect of barriers to entry on multinational companies from point of view of host country.2. Subject crossover.Barriers to entry belong to range of market structure in industry economics, and investment of multinational companies belongs to range of FDI in international economics. This paper use theories of industry organization to study international economics...