Nonmarket strategies and behaviours for MNEs to build a congenial political economic environment in Mainland China
by Yongqiang Gao
International Journal of Business Environment (IJBE), Vol. 2, No. 1, 2008

Abstract: Successful investing in China requires investors to master a complex political and regulatory environment. Three basic theories – institutional theory, resource dependency theory and agency theory – are useful to explain why and how Multinational Enterprises (MNEs) take nonmarket strategies and behaviours to deal with a host government. Based on these theories, this paper proposes three basic strategies, namely, guanxi strategy, competitive strategy and leverage strategy, for MNEs to deal with the Chinese government and build a congenial political economic environment. The reasons why these strategies are valid and how to use them are also discussed.

Online publication date: Fri, 25-Jan-2008

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