Ownership choice and foreign direct investment in the People's Republic of China.

摘要

Since 1978 when China opened its door to the world, foreign capital has poured into China. China has been increasingly concerned about how to manage these foreign capital. To examine China's policies toward foreign direct investment, however, one must first understand the behavior of multinational companies in China. The objectives of this dissertation are: to provide a simple game theory model to explain the choice of foreign entry modes in China, which has been ignored by economists; and also to examine one of China's important policies toward foreign direct investment: discriminatory export share requirements. The dissertation finds: (A) the higher the degree of transaction specificity of foreign assets invested, the more likely the entry mode is a wholly foreign owned enterprise. (B) the higher the external risk of foreign investment, the more likely the entry mode is an equity joint venture enterprise. (C) the government's discriminatory export share requirement will direct foreign capital to wholly foreign owned enterprises. (D) institution matters in implementing discriminatory export share requirement.; The findings (A), (B) and (C) are consistent with the empirical results.