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Subnational differences and entry mode performance: Multinationals in east and west China

Published online by Cambridge University Press:  29 November 2017

Anran Li ,
Brent Burmester  and
Peter Zámborský
Anran Li*
Affiliation:
Department of Management, School of Business, The Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong
Brent Burmester
Affiliation:
Department of Management and International Business, School of Business, The University of Auckland, Auckland, New Zealand
Peter Zámborský
Affiliation:
Department of Management and International Business, School of Business, The University of Auckland, Auckland, New Zealand
*
Corresponding author: aliai@connect.ust.hk
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Abstract

We compare the influence of entry mode choice on subsidiary performance in two developmentally-differentiated regions of a developing host country. Analysis of 113 subsidiaries located in two provinces of China indicates that wholly owned subsidiaries outperform joint ventures in the developed region, whereas joint ventures outperform wholly owned subsidiaries in the less developed region. However, the smaller performance gap between wholly owned subsidiaries and joint ventures in the developed region indicates that the magnitude of influence of entry mode choices on performance varies across subnational regions. Firms must therefore be more discriminating in formulating entry strategies to regionally heterogeneous countries.

Keywords

Chinese contextentry mode selectionfinancial performancesubnational heterogeneity
Type
Research Article
Information
Journal of Management & Organization , Volume 26 , Issue 4 , July 2020 , pp. 426 - 444
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2017

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