Browsing by Author "Luo, Wen"

The main purpose of this Master’s thesis was to examine the impacts of distance factors on the equity-based entry mode choice of forest multinational companies (MNCs) by testing the distances (both in cultural and geographical terms) combined with corporate and local factors. China was chosen as the case host country in this study, and the collected data followed the top global forest MNCs that made investments in China at the subsidiary level. Based on a series of internationalization theories and previous studies, 8 hypotheses were proposed. These hypotheses were suppositions of selected factors having positive or negative impacts on the preference of MNCs for wholly owned subsidiaries (WOS) rather than the joint venture (JV) mode. Logistic regression was utilized as the methodology to test these hypotheses.The dependent variables were defined as WOS vs. JV, and the selected independent variables were cultural and geographical distance, experience of the host country, investment size, resource commitment and geographic concentration. The development and status quo of forest foreign investment in China were given by a descriptive statistical analysis. The results demonstrated that the most popular home countries of the forest corporations in this case were the US, Japan, Hong Kong and Singapore, and the most common investment locations in China were the east coastal regions. Furthermore, foreign investment in the forest industry showed differences between historical stages and economic regions. The statistical results indicate that a greater geographical distance, experience of the host country, and geographical concentration have positive impacts on the preference for WOS, while the CDI has a negative impact on it. However, investment size and resource commitment showed no impact on the equity-based entry mode choice in this study. The conclusions at the end of this thesis describe the future trend in and potential for forest foreign investment in China.