Pre-entry Decisions and New Venture Survival in China

This research paper applies the Resource Based View (RBV) to investigate the impacts of pre-entry decisions made by foreign investors on the survivability of new Foreign Invested Enterprises (FIEs) in China. Using a sample of 4,764 new ventures with the Cox survival model, we found that factors including the CATA (Current Assets to Total Assets) ratio, firm size, and technology status of the industries are positively related to new venture survival, and that factors like the inland area dummy variable are negatively related to new venture survival. The result for having a state-owned firm as a partner is not significant in our study. By identifying the key factors mentioned above as unique resources for FIEs, based on the RBV, the results of our research have the potential to help foreign investors to improve their firms? chances of success before they establish their new ventures in the Chinese market.