Entry Mode Choices of Chinese Investors in Europe

In the nowadays globalized world Foreign Direct Investment and Multinational Enterprises have an increasingly important role for the world economic activity. Besides, rapidly developing countries and China, in particular, are becoming one of the main sources of Foreign Direct Investment. This paper examines the entry mode choices of Chinese multinational enterprises in Spain. A new theoretical framework is proposed, where the entry mode preference is examined as a two-dimensional decision, namely joint- venture vs wholly-owned subsidiaries and greenfield vs acqusition projects. Then, after an empircial section dedicated to Chinese foreign direct investment in Europe, the study provides a special focus on Spain and reviews Chinese FDI flows on a regional, industry, and firm level. This is the first attempt so far to characterize the entry mode preference as a two-dimensional decision, and apply this framework to Chinese multinationals. Hence, this work should prove useful to academic researchers working in the field of Chinese investment as well as anyone who would like to get an overview of Chinese firms that have invested in Spain.