Entry mode and performance of foreign direct investment : the role of strategic orientation

Multinationals have distinctive strategic orientations toward the host country when investing overseas: to explore the local market or to establish efficient manufacturing for export. Analyses of FDI operations in China suggest that local market oriented firms tend to rely on the joint venture mode while export oriented investors mostly choose to be wholly owned operations. Moreover, there are significant differences between local market oriented and export oriented firms across four different performance measures. Results of the study suggest that researchers should consider the difference in FDI's strategic orientation when attempting to identify success factors and recommending performance-enhancing strategies.