Analysis Of The Instability Of Sino-Foreign Joint Venture

There has been a gradual growth in the amount of utilization of foreign capitals since China's reform and opening up to the outside world. In 2003, the amount of foreign investment surpassed that of America for the first time, which also made China the leading country in terms of attracting foreign capitals. With the growth in FDI, corresponding changes have also taken place in the ways of FDI entry which can find its embodiment in the following two facts: the newly-added FDI tends to be solely foreign-owned, the existing joint ventures are turning into solely foreign-owned enterprises in succession. As there are still 12521 joint ventures in China, the dominant form of FDI is still joint venture in some fields, and this form is also required as a must by some industries. With the development of economy, numerous domestic enterprises also begin to invest in foreign countries, joint venture being the main form of investment. As a result, the researches on the internal instability of the joint ventures are both theoretically and practically significant. It helps reduce the conflicts of the domestic joint ventures, perfects the governance structure of the enterprises and provides a theoretical and realistic basis for the domestic enterprises to go outside and face the complicated and severe international political and economical environment.The thesis firstly reviewed the related domestic and overseas theories. Then, taking the internal instability of the joint ventures as the breach, the thesis puts emphasis on the analysis of the influence of factors. The thesis analyzed the process of instable changes and the consequence of instability on the basis of transaction cost theory and dissipative structure theory. Finally, the thesis studied the case of Pepsi limited company in Sichuan province in order to analyze in detail the process and consequence of instability in joint ventures.