Entry Mode And Location Choice Of Overseas Operation Of China Oil Companies

As a member of developing countries,China has seen continuing satisfactory development.Under accelerated economy globalization,the pace of opening-up march has also picked up.Along with foreign enterprises rushing into China's market one after the other,pushed by pressure and demand from both inside and outside,a batch of Chinese enterprises act actively,marching into overseas markets.China oil companies are the very pilots for this out-going wave.With global oil industry gradually globalizes and domestic oil supply increasingly strains,further transnational operation;participating in global oil competition becomes our have-to choice.When it comes to decision making process of overseas cooperation,Location choice and Entry Mode selection are the essential problems that we have to deal with because they play a decisive role in the following stages of project appraisal and implement.Generally,there are three modes for entering overseas markets,namely Export,Licensing Trade,and Foreign Direct Investment which in detail includes Greenland investment and M&A.For specific enterprise in every industry of certain Location,the adaptability of each entry mode differs.For China oil companies,knowing how to choose the best operation location and the most reasonable entry mode is the purpose and significance of this paper.This paper first reviewed motivation theories of foreign direct investment and compared the characteristic,advantage and disadvantage of each of the three entry modes.Basing on comprehensive review on traditional theories,it classified both determinants and in-determinants in entry mode selection,analyzed the internal mechanism of the decision-making process.Furthermore,this paper discussed the best entry mode choice for our national oil companies entering the upper,middle,and downstream markets in term of enterprise accumulation(global competitiveness) and company objective(motivation).In addition,it construed impacts on the selection of entry mode from those unique factors China oil companies are facingIn the last part,this paper tried to set up specific appraisal model to conduct principle component analysis for investment environment and cluster analysis in host countries,aiming at providing empirical reference for investment location selection.