Revisting The Role Of Cultural Distance In Chinese Mnc’s FDI Mode Choice

China nowadays exerts a increasingly significant role in the world economy featured by the accelerating pace of overseas investment, and has become a major capital exporting country with the Chinese "going out" strategy. The entry mode is the critical problem of the overseas investment activities, and the selection of the entry mode is decided by many factors, especially the cultural distance. The role of national distance culture in the multinational corporation’s (MNC) foreign ownership mode decision has been extensively studied in the international business literature. However, the literature has uncovered conflicting evidence regarding the relationship between national cultural distance and foreign ownership modes and the existing empirical studies mainly concentrate in developed countries while domestic studies are seldom empirical focusing on foreign capital investing China’s market. Therefore, revisiting cultural distance on Chinese MNC’s entry mode is of significance theoretical and practical importance.It should be noted that the oversea entry mode includes export,licensing and foreign direct investment, and this study is limited to foreign direct investment (FDI), and from the equity perspective FDI entry mode include wholly owned subsidiaries(WOSs) and equity joint ventures (JVs) this two mode strategy. Firstly, we theoretically analyze the impact of cultural distance on the FDI entry mode, and the moderating effect of third variables on the role played by cultural distance Secondly, we analyze150entries by50Chinese MNEs during the year2010-2013, and conduct the empirical analysis based on110entries, selecting Hofstede cultural distance of5dimensions.With the two logistic regression model, We comprehensively examine cultural distance’ direct impact on FDI entry mode, and also examine the other factors’moderating role through hierarchical regression analysis and subgroup regression analysis. Through empirical analysis, we find that the cultural distance showed a positive impact on the Chinese MNEs’ selection of wholly owned subsidiaries(WOSs) over equity joint ventures (JVs); And host country risk has no contingent role on the role played by cultural distance; But the firm-specific variables as international experience and technological intensity can have moderating role on the role played by cultural distance.Finally, according to the empirical conclusions, we provide some suggestions for government and corporate.