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The effect of corruption distance and market orientation on the ownership choice of MNEs: Evidence from China

Duanmu, J-L (2011) The effect of corruption distance and market orientation on the ownership choice of MNEs: Evidence from China Journal of International Management, 17 (2). 162 - 174. ISSN 1075-4253

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Abstract

Motivated by previous studies on the effect of corruption on entry strategies of Multinational Enterprises (MNEs), this research examines how corruption distance influences the choice between wholly owned subsidiary (WOS) and joint venture (JV) for MNEs operating in China. We found that MNEs from countries which are less corrupt than China prefer WOS over JV; the higher corruption distance it is between these countries and China, the higher probability their MNEs choose WOS over JV. In contrast, MNEs from equally and more corrupt countries do not prefer WOS over JV; nor the corruption distance affect their entry mode decision. Market orientation has a universal and powerful effect on the entry mode choice regardless which group of countries MNEs are from. It also weakens the tendency for MNEs from less corrupt countries to choose WOS over JV.

Item Type: Article
Additional Information: NOTICE: this is the author’s version of a work that was accepted for publication in Journal of International Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Management, 17 (2), June 2011, DOI 10.1016/j.intman.2011.01.003.
Divisions: Faculty of Business, Economics and Law > Surrey Business School
Depositing User: Symplectic Elements
Date Deposited: 02 Mar 2012 15:12
Last Modified: 23 Sep 2013 19:09
URI: http://epubs.surrey.ac.uk/id/eprint/191848

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