Chinese market entry possibility by the means of joint ventures.
Peter, Gysler Andreas.
Date of Issue2007
College of Business (Nanyang Business School)
Worldwide foreign direct investment(FDI) has grown at an average of 15.7% between 1970 and 2005 and still today is an important driver for the globalisation process (UNCTAD, 2006). It is the large firms, however,that have been its main drivers (Buckley, 1997; Eden & Levitas, 1997; Fujita, 1995). Small and medium enterprises (SMEs) do face high barriers when considering engaging in FDI activities and are more likely to fail in comparision to a large multinational enterprises (MNEs) (Acs & Mock, 1997; Eden & Levitas, 1997). These barriers stem from the fact that SMEs oftentimes dispose of only limited resources, in particular limited financial, information and managerial resources and hence have a different attitude towards risk (Kirby & Kaiser, 2003). Such resource limitations, however, can be overcome by the means of forming a Joint Venture (JV).