Equity Strategy Change Of FDI In China

This study theoretically and empirically explores determinants which impact on changes in equity strategy after China entered WTO .Substantively, equity strategy is an institutional arrangement chosen by the firm to operate in the foreign market, and the ultimate purpose of equity strategy is to generate and distribute the organizational rents. Integrating the theory of monopolistic advantage, the theory of product life cycle bargaining power theory, transaction-cost theory and elastic theory international production. This study analyses the two ways of changes in equity strategy, namely why wholly foreign-owned subsidiaries becoming the dominant entry mode of FDI into China market and why equity joint ventures in China being intended wholly foreign-owned subsidiaries.Integrating the different factors which impact the strategy in equity stractive, this study develops a double-motivation mode which explain the reason that wholly foreign-owned subsidiaries becoming the dominant entry mode of FDI into China market and two-phrase theoretical model explaining the wholly foreign-owned trend.Based on the theoretical model analysis, this study empirically tests determinants which impact it that foreign-owned subsidiaries becoming the dominant in Greenfield in China. By using Log . This study found the positive relation between GDP , Multinational corporation global stratage and it. Beside it, the phenomenon also found disposition between market rival and it.At last, this study analyses the impact to our country economy it is bringing and provide some ways to prevent the bad impact.