International Pharmaceutical Firms' Market Entry Modes Decisions into China: A Comparison Between Early-Entrants and Late-Entrants

Based on an eclectic mode/developed by combining Root (1994), and Mockler and Dologite's (1997) conventional entry mode theory and Kumar and Subramaniam's (1997) contingency entry mode theory, this paper aims to investigate the determinant factors that affected international pharmaceutical firms' decisions in choosing either a joint venture or sole venture entry mode into the Chinese pharmaceutical manufacturing industry. It will also compare the perceptions of senior managers from Early-Entrants who entered into China before 1992 and Late-Entrants who started investment in China since 1992 on the impact of firms' international and external variables on the firms' entry mode decisions. The results suggested that China environmental factors and the market factors appeared to be the major determinants of forming joint ventures. Whereas, parent firm's decision task related factors appeared to be the major determinant of establishing a sole venture. The Early-Entrants paid more attention to the China's environment factors, whereas the Late-Entrants concerned more about China's market factors. The importance of foreign investors' ability to adapt products, cost of working capital, and cost of long-term investment capital has been decreased significantly, whereas foreign investors' technology availability has become more important to foreign investors since 1992.