Economy

Contents TOC \o "1-3" \h \z \u 1. Introduction PAGEREF _Toc389290771 \h 12. Theoretical framework PAGEREF _Toc389290772 \h 13. Factors of market selection for transnational corporations in China PAGEREF _Toc389290773 \h 23.1 Factor from inner strategic motivations PAGEREF _Toc389290774 \h 33.1.1 Market-seeking motivation PAGEREF _Toc389290775 \h 43.1.2 Efficiency-seeking motivation PAGEREF _Toc389290776 \h 43.1.3 Resource-seeking motivation PAGEREF _Toc389290777 \h 53.2 Location factors PAGEREF _Toc389290778 \h 63.2.1 Infrastructure PAGEREF _Toc389290779 \h 63.2.2 Labor cost PAGEREF _Toc389290780 \h 73.2.3 Policy PAGEREF _Toc389290781 \h 74. Conclusion PAGEREF _Toc389290782 \h 8Reference PAGEREF _Toc389290783 \h 9
1. Introduction
During the past three decades, there has been a drastic increase in global business activities by transnational corporations (TNCs) because of the changing international political and economic environment. Foreign direct investment and market selection decisions made by the multinational enterprises directly affect the organization performance which plays an important role in economic development patterns and international flow of technology, knowledge, good and capital (Luo and Park, 2001). The TNCs need to be cautious before they make a selection from the various entry modes to enter the emerging market, especially in the new and unstable market (Luo, 2007). The factors affecting the foreign direct investment (FDI) and market selection decisions varies among the different multinational corporations and host countries. In this assignment, the factors that influence the TNCs entering the China market are identified and discussed in detail. Besides, researchers make a brief review on the development of entry modes adopted by TNCs in different stages to illustrate the research topic. Lastly, researchers make general recommendations to the Chinese domestic enterprises based on the impacts of FDI and global expansions conducted by the