Abstract
How does online trading affect Western manufacturers' entry modes in China? This inductive study of 20 Western manufacturers and their Chinese intermediaries led to propositions exploring that question. Findings from the study indicate that online trading intensifies the information exchanges between Western manufacturers and their Chinese end users. Such information exchanges provide Western manufacturers with detailed market-specific knowledge. Moreover, online trading intensifies the competition between Western manufacturers as their customers can keep well-informed of their product qualities, new technologies, and prices. Online trading has great positive impacts on Western manufacturers' shift from low-control and low-risk entry modes to high-control and high-risk entry modes.
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