Abstract
This thesis investigates the host and home country determinants of Chinese outward foreign direct investment (OFDI) entry mode choice between a wholly-owned subsidiary or a joint venture under the lenses of the transaction costs theory. Using Chinese OFDI data collected from 2003 to 2016, the results show the host country's low regulatory quality will increase the likelihood of Chinese MNEs to adopt wholly-owned subsidiaries instead of joint ventures. SOEs particularly prefer wholly-owned subsidiary entry mode when they face uncertainty caused by low regulatory quality, while joint venture modes are preferred when SOEs invest in host markets with high regulatory quality. A quasi-experiment is also performed to test how the 2014 OFDI approval process liberalization influences the entry modes in Chinese OFDI. The results indicate that, for SOEs, the policy liberalization in 2014 led to more join ventures. This may result from the fact that the policy liberalization reduces transaction cost for joint ventures, and therefore encourages this entry mode. To conclude, this research finds that SOEs were more willing to enter as wholly-owned subsidiaries in host countries that have unstable and weak institutions, and SOEs prefer to enter as joint venture in new markets when home country has less regulatory burden.