MNE Investment Strategy and Risk Evaluated in China

Yuang Shiang Chao


In our findings, we link resource dependence theory to our findings to explain why China investment(CI) plays an important role in foreign diversification, especially in China. When TMNEs extend diversification activities, they can seek opportunities and new market through geographical diversification and can absorb new information and install different knowledge and energy into internal organization to obtain better performance level.We provide some sincere suggestions to decision-makers and CEOs of MNEs or those TMNEs consider entering into the China market. TMNEs should consider carefully not over-inveested in China.MNE should focus on their cored investment fields with moderately middle-level diversification.According to our findings,CI strategy is possibly a better way to gain scope advantages.The most important consideration for MNE decision makers is be careful in the context of change especially china government political policy which is highly changeable from governmental macro-economic adjustment policy. Furthermore,the inflow and outflow of finance not so flexible to operate will also limit the cash flow allocation efficiency to create better financial performance.

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