||Since “Doi Moi” (renovation) begun in 1986, Vietnam has engaged in economic reform on an on-going basis in order to create a fruitful investment environment and attract foreign investors to engage in its market. As the total investment amount is over 19 billion US dollars, the role of Taiwanese investors played is more important than before. |
Notwithstanding that the investment environment in Vietnam has improved more significantly than ever, the enterprises’ operation still has to bear considerable risk. Due to Vietnam’s special single-party state constitution, for foreign investors, it is expected that the political risk is existed with the high feasibility of government change policies and ignore investors’ benefits.
According to this, the purpose of this research is to realize how the host’s political risk influences Taiwanese MNEs’ entry mode choice. As previous studies generally focused on the discussion of the relationship between political risk and entry mode choice, however, the moderating effects of firms’ own resource and advantages are less mentioned. Therefore, this thesis tries to provide a theoretical framework based on resource-based view, eclectic theory and other related theories that includes profitability, financial structure, and R&D capability as the contingency factors to examine how these factors moderate the relationship between political risk and entry mode choice.
The findings of this study reveal that when the political risk in Vietnam getting higher, Taiwanese MNEs are more likely to engage in Vietnam through JVs. Besides, the positive moderating effect of profitability is also existed. It shows when a firm with higher profitability, it will more tend to choose JVs as the political risk in Vietnam rising.