Abstract
The international strategic alliance (ISA) constitutes a preferred entry mode of FDI in China, a country that is now the second largest FDI recipient in the world. This paper analyses the financial performance and characteristics of Sinoforeign ISAs from a comparative perspective relative to wholly-owned subsidiaries and Chinese domestic firms. It is suggested that ISAs outperform local firms in terms of efficiency and wholly-owned subsidiaries in terms of market growth, but confront more financial risks in liquidity and solvency. Implications for management are discussed.
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