Entry Mode Choice of FDI Firms in Emerging Markets: An Evidence from Vietnam

ABSTRACT

The purpose of this article is to analyze and explain the entry mode choice of foreign investors when entering Vietnam. One reason for the difficulties of previous research in entry mode topics is the lack of data since data regarding FDI firms are rather difficult to collect. Using a unique data of 5236 foreign firms who made investments in Vietnam during the period from 2005 to 2016, this study contributes to the overall understanding of entry mode choice in emerging markets at firm level. The statistical results indicate that type of ownership, industry sector, and investment capital are positively associated with Equity Joint Ventures (EJV) and negatively with its Wholly Owned Subsidiaries (WOS) choices. In addition, project orientation, project duration, adjustment of project scale, investors from Africa and Latin America, and year of project establishment variable influence positively the MNE’s WOS choice and negatively its EJV choice.

KEY WORDS:

• entry model
• joint venture
• type of market entry
• Vietnam
• wholly owned subsidiary

Notes

1. The information is collected from The General Statistics Office in Vietnam. http://www.gso.gov.vn/.