The Influences of Formal and Informal Institutions on Taiwanese Family-owned Firms' Entry Mode Choice

摘要

This study is designed to shed further light on the foreign direct investment (FDI) decision by the family business, and address the question: Under what situation family-owned firms make the entry mode with high risk commitment. The data source for this study was obtained from Taiwan Economic Journal Database. The database is a comprehensive source for Taiwanese firms' foreign direct investments in 13 countries (Japan, U.S., Indonesia, India, France, Finland, Thailand, Malaysia, Netherlands, Philippines, Vietnam, Germany and Korea). This study included 2451 FDI projects. This study demonstrates that the formal and informal institutions influence a family firm's entry mode decision. In the informal institutions, the family- owned firms choose the joint venture (JV) arrangement. In the formal institutions, the family- owned firms choose the wholly owned entry mode. The results display what situation family-owned firms choose the entry mode.