Strategic Choice and FDI Performance

This paper attempts to examine the impact of Korean firms’ strategic choices in entering the Chinese market on their FDI performance. Based on previous research, I have identified five (5) market entry-related strategic variables(entry mode, entry timing, entry location, entry scale, and entry purpose) and three (3) control variables(firm size, level of globalization, and type of industry) that can influence the performance of Korean firms in China. I tested seven (7) hypotheses for the five strategic variables and two (2) moderator effects using a sample of 371 projects by Korean firms in China. The results reveal that entry mode, entry timing, entry purpose, firm size, level of globalization, and type of industry are crucial to ensure Korean firms successful performances. In addition, I find that the moderating effect of entry scale was negatively significant in the relationship between entry mode and performance.