Equity-based entry modes of the Greater Chinese Economic Area's foreign direct investments in Vietnam

In January 2007, Vietnam became the 150th member of the World Trade Organization (WTO). Vietnam is located in the heart of Asia and has a resource-rich economy, which offers it a significant advantage in attracting foreign direct investments (FDIs). The research focuses on equity-based entry mode choices adopted by multinational corporations (MNCs) in the Greater Chinese Economic Area (GCEA) for entering Vietnam. The statistical results indicate that equity-based entry modes are significant when FDI firms entering Vietnam originate from the GCEA, which includes Mainland China, Hong Kong, Taiwan, and Singapore. However, the interaction results show that industry does not have a moderating effect on the relationship between location and entry mode, whereas it is not found that industrial cluster is specific to any one location. The generalized model has implications for the theoretical and managerial perspectives of both the host and the home countries.

► Equity-based entry mode choices adopted by MNCs in the GCEA for entering Vietnam. ► Equity-based entry modes are significant when FDI firms entering Vietnam originate from the GCEA. ► Implications on the theoretical and managerial perspectives for host and home countries.