The Study On Multinationalization Performance And Entry Mode Of Machinery Manufacturing Enterprises

Nowadays more and more Chinese enterprises are going international under the condition of economic globalization. Sub-prime crisis has taken a negative effect on the enterprises in developed nation. With the saturation of the domestic market, the speed of multinationalization for Chinese enterprises has accelerated obviously. According to information released by the Ministry of Commerce, Chinese investors have undertaken direct investment for2283foreign enterprises in a total of122countries and regions, which accumulated non-financial overseas direct investment43.3billion U.S. dollars growth by6.5%compared with2008. Nowadays the overall multinationalization of China machinery manufacturing enterprises is not widespread. We need exploiting foreign advanced technology resources, absorbing and introducing advanced technology to improve Chinese machinery manufacturing enterprises technological level and core competitiveness. Only by this way can we catch up with the powerful multinational companies abroad. In order to improve the development of machinery manufacturing enterprises and to avoid the multinationalization risk, it is urgent and necessary for us to study the multinationalization of Chinese machinery manufacturing enterprises.Although many scholars have made study of the relationship between multinationalization degree and performance, but they did not reach a unanimous conclusion. And the multinationalization degree and performance shows different relationship in different regions or industry. This paper empirical analyses the relationship between multinationalization degree and performance for Chinese machinery industry, which taking89listed machine manufacture enterprise as the sample. Estimated by GLS panel data analysis, we found that there was a significant positive linear correlation between the multinationalization degree and performance for Chinese machinery manufacturing enterprises. That is to say, enterprise performance increases by multinationalization degree. Finally, this paper aims at analyzing the effect of external uncertainty on the entry mode choice when investing abroad. Through anglicizing of previous studies, we found that many entry mode studies have modeled the cultural distance or the political risk level as the important factors of multinationalization entry mode. But through empirical analyses, we found that governance quality of foreign countries was a better factor of multinationalization. We also found that all aspects of governance quality of foreign countries had great effect to multinationalization entry mode, such as, voice and accountability, political stability, government effectiveness, rule of law, control of corruption and so on.