TMT Characteristic And Heterogeneity On MNEs OFDI Entry Mode:The Moderating Role Of Culture Distance

The choice of overseas entry mode for Chinese MNEs is an emerging important issue in the new era of Chinese MNEs' overseas strategy.Many studies have proven that the choice of entry mode,which represent many essential factors of oversea operation,such as resource commitment,control and technology transfer,would have a prolong and significant impact on the performance of MNEs' offshore subsidiaries.Focusing on the OFDI(Outward Foreign Direct Investment)entry mode and TMT(Top Management Team),this paper tries to investigate the impact of TMT characteristic and heterogeneity on MNEs OFDI entry mode choice and verify the moderating role of culture distance.This paper first reviews the definition,related theories of MNEs overseas entry model as well as the impact of TMT characteristics and heterogeneity on corporate strategy.Based on the literature review,this paper narrowed down the research scope to the impact of which TMT characteristic and heterogeneity would have an impact on MNE OFDI entry mode and what it is.Also,from the literature review,it is found that that cultural distance,as a crucial environmental factor,will significantly affect the information input and decision risk in TMT decision-making process,which would influence the decision results.Therefore,this paper regards culture distance as a moderating variable and adds it to the model to verify the moderating effect of culture distance.Finally,based on all the literature reviews above,this paper selects TMT education background,career background,international background and their heterogeneities as independent variables.On the biases of the OFDI list announced by Chinese Ministry of Commerce,this paper selects 398 OFDI investment cases among 39 Chinese MNEs listed on the main board and the GEM during 2005-2015 as research samples to investigate the impact of TMT characteristic and heterogeneity on MNEs OFDI entry mode choice and verify the moderating role of culture distance.The empirical results show that:(1)TMT average educational background and its heterogeneity are significantly and positively correlated with greenfield OFDI entry mode;(2)The proposition of output function(such as R&D and manufacture)members of TMT and TMT career background heterogeneity are significantly and positively correlated with greenfield OFDI entry model;(3)TMT international background and its heterogeneity have no significant impact of MNE OFDI entry mode;(4)Culture distance will significantly strengthen the positive correlation between TMT international background and greenfield entry mode;(5)Culture distance will significantly weaken the positive correlation between TMT education background heterogeneity and greenfield entry modeThis paper verifies the impact of TMT characteristics and heterogeneity on the OFDI entry mode of Chinese MNEs as well as the moderating role of culture distance within it through theoretical carding and empirical research,which not only fills the theoretical gap of this study but also provides theoretical guidance of how to build an appropriate TMT for those Chinese MNEs which are currently pursuing overseas market.