Policy Constraints And Strategic Choices: MNE Subsidiaries Market Penetration In China

Abstract

This study describes how firm level decisions and capabilities correspond to policy conditions in a host country where local market access is constrained and success is contingent on compliance with cultural hegemony. Using data from surveys gathered from multinational enterprise (MNE) subsidiaries operating in China, we describe the mode of entry the firms have used to penetrate and exploit markets in light of the constrained strategic choices open to their subsidiaries. We also expose the patterns of growth accomplished by the MNE and their underlying bases of competitive advantage. Finally, we relate the degree of centralization we observe among the respondents strategies.