Evaluation of Entry Mode of Overseas Investment Using Grey Relation Method

Abstract

As Vietnam has been taking active measures to improve its environment for FDI (foreign direct investment) in recent years, more and more Taiwanese manufacturers show their presence there. However, there was little empirical research devoted to industrial investment in Vietnam owing to difficult sampling and data acquisition. Meanwhile, traditional probability statistical method could not make sense in this aspect. As an innovative method, Grey Theory could help to analyze small samples from Taiwanese manufacturers in Vietnam. This paper attempted to acquire major influential dimensions and variables to the entry mode of Taiwan manufacturers, and then determine the ranking of their overall performance using Grey Situation Decision-Making method. Finally, GM(0,N) model was used to analyze the recognition degree of different manufacturers for the entry mode. It is thus learnt that different industries, such as handicraft and leather bag, have different recognition degrees on the entry mode, thus providing a reference for foreign investors.