A Research On Entry-Modes Decision Of Chinese Enterprises’ Outward FDI

With the continuous development of global economic integration, the economic interdependence and cooperation is deepening between the countries in the world. Foreign direct investment, as the main form of international capital flow, has become an important issue in the field of international economic research. But outward foreign direct investment of Chinese enterprises is still in its infancy and a lot of issues associated with it are worth thinking about and exploring. Foreign direct investment (FDI) involves two important strategic decisions:entry mode decisions and location choice decisions. These decisions not only determine the direct effects of foreign direct investment, but also have a profound impact on the long-term business development and strategic layout.In order to make the right entry mode decisions that suits their own development, enterprises, in the process of foreign direct investment, must make the right analysis and judgments about factors, like governance of the host country, country risk, the way to the market of the host country and enterprise resources and constraints, etc. Thus, the entry mode selection of foreign direct investment matters greatly whether Chinese enterprises are to success at abroad and in this international market place. Cross-border mergers and acquisitions and Greenfield investments, as two main modes of foreign direct investment of Chinese enterprises, are important issues in academia research area.On the basis of a comprehensive literature review of domestic and foreign research theories and results of FDI, this paper briefly analyzes the current situation of both FDI and the entry mode of Chinese outward FDI. After analyzing the main factors that effects the entry-mode decision of Chinese Outward FDI, this paper also choose several factors that are important and easy to measure, including firm size, corporate growth, corporate R&D capabilities, cultural distance, as well as the host government governance quality. This paper uses Logistic Regression Model to conduct the empirical test. With the result of the empirical test, this paper also offers some useful suggestions to help Chinese enterprises make better decision when they intend to conduct OFDI activities.