Moderating Effect and Entry Mode Strategy – Cultural Distance of International Experience

• Main Authors: Chien, Hsian-Yun, 簡湘雲
• Other Authors: Chang, Yi-Chieh
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/5tes47

碩士 === 聖約翰科技大學 === 企業管理系碩士班 === 104 === In the era of global internationalization, when multinational companies engaged in overseas investments, they faced the important problems, including the entry modes choice, whether the multinational enterprises have enough investment experience, and the difference of the cultural distance between the parent company and the host country. These factors all affect the decision making process. Thus, this study take the cultural distance as the moderating variables of the multinational enterprises overseas investments entry mode relationship. And further explore the impact of investment experiences against the multinational enterprises overseas direct investments entry mode relationship. This study took the data from Taiwan Economic Journal (TEJ) database, including Taiwanese multinational enterprises' overseas investment projects in 13 countries, such as the United States, Japan, Malaysia, etc., for the period from 1999 to 2008. There are 2,451 valid samples in total. It used Binary Logistic Regression to verify the related hypotheses. The empirical results showed: (1) It showed a significant positive correlation in the impact of investment experience towards multinational enterprises overseas direct investments entry mode. It meant richer the "general international experience" multinational enterprises . Regarding the overseas investment entry mode, multinational enterprises would prefer to choose "sole proprietorship" as entry mode. (2) Cultural distance and investment experience have the moderating effect of the multinational enterprises overseas direct investment entry mode, and it showed significant positive correlation. It showed that when the cultural distance between the parent company and the host country is bigger, the multinational enterprises' investment experiencew ould be "general international experience". When the multinational enterprises are less familiar with the local regulation and values of the host country, the joint venture can reduce the problems faced during the multinational entry. Thus, the multinational enterprises will prefer to choose "joint venture" as the overseas investment entry mode. When the multinational enterprises' investment experience became "local investment experience", because of their familiarity with the host country's regulation and values, and there are more transaction costs and agency problems in a joint venture market entry. Hence, the multinational enterprises will prefer to choose "sole proprietorship" as the overseas investment entry mode.