... licensed. This entry mode is often used by smaller companies that do not have the financial or human resources to enter a foreign market. Equity joint ventures are an equity sharing arrangement between two partners or a consortium of three or more partners. The partners share the risks of a joint venture entity and share profits or losses in proportion to their equity ownership. Equity joint ventures are considered to be a relatively risky entry mode because, in addition to committing resources, technology and human resources, companies are also dependent on their ability to work successfully with managers from another company. In China, equity joint ventures may reduce risk because local Chinese partners may help foreign companies to understand how to be more successful in the Chinese business environment. Wholly owned entry modes include the development of subsidiaries either from scratch using a greenfield approach, or through acquisition of existing Chinese ...

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