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The Exchange Relationship with Channel Middlemen Foreign-Investment Enterprises in China

ABSTRACT This paper studies the marketing channel structures foreign investment enterprises (FIEs) choose at both the preliminary stage and development stage of their business operations in the transforming economy of China. In-depth interviews with representatives from ten FIEs and follow-up interviews with twenty-three marketing channel practitioners in China provide the qualitative data for this study. Findings indicate that at the preliminary stage of business operations of FIEs in China, small FIEs chose the market governance channel structure and other size FIEs chose the partnership channel structure. At the development stage, multinational enterprises employ these two channel structures and the ownership channel structure simultaneously. Some small experienced FIEs, however, still rely on market governance channel structure whereas medium FIEs use a partnership channel structure.