International joint ventures and the value of growth options

Academy of Management Journal

Volumn 51, Issue 5, 2008, Pages 1014-1029

  Tong, Tony W ^a,d   Reuer, Jeffrey J ^b,e   Peng, Mike W ^c  

^a UNIVERSITY OF COLORADO   (United States)

^b PURDUE UNIVERSITY   (United States)

^c UNIVERSITY OF TEXAS AT DALLAS   (United States)

^d UNIVERSITY OF COLORADO   (United States)

^e PURDUE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 38349182072     PISSN: 00014273     EISSN: None     Source Type: Journal    
DOI: 10.5465/AMJ.2008.34789680     Document Type: Article

References (91)

1. Adner, R., & Levinthal, D. 2004. What is not a real option: Considering boundaries for the application of real options to business strategy. Academy of Management Review, 29: 74-85.
2. Alessandri, T. M., Lander, D. M., & Bettis, R. A. 2002. Valuation using perfect information: Implications for capital investment decision making. Paper presented at the annual meeting of the Academy of Management, Denver.
3. Balakrishnan, S., & Koza, M. P. 1993. Information asymmetry, adverse selection, and joint ventures. Journal of Economic Behavior and Organization, 20: 99-117.
4. Barkema, H. G., Bell, J. H. J., & Pennings, J. M. 1996. Foreign entry, cultural barriers, and learning. Strategic Management Journal, 17: 151-166.
5. Barkema, H. G., Shenkar, O., Vermeulen, F., & Bell, J. H. J. 1997. Working abroad, working with others: How firms learn to operate international joint ventures. Academy of Management Journal, 40: 426-442.
6. Barkema, H. G., & Vermeulen, F. 1997. What differences in the cultural backgrounds of partners are detrimental for international joint ventures? Journal of International Business Studies, 28: 845-864.
7. Beamish, P. W. 1985. The characteristics of joint ventures in developed and developing countries. Columbia Journal of World Business, 20(3): 13-19.
8. Belsley, D. A., Kuh, E., & Welsch, R. E. 1980. Regression diagnostics. New York: Wiley.
9. Berg, S. V., & Friedman, P. 1981. Impacts of domestic joint ventures on industrial rates of return: A pooled cross-section analysis, 1964-1975. Review of Economics and Statistics, 63: 293-298.
10. Bergh, D. D., & Lawless, M. W. 1998. Portfolio restructuring and limits to hierarchical governance: The effects of environmental uncertainty and diversification strategy. Organization Science, 9: 87-102.
11. Bowman, E. H., & Hurry, D. 1993. Strategy through the options lens: An integrated view of resource investments and the incremental-choice process. Academy of Management Review, 18: 760-782.
12. Brealey, R. A., & Myers, S. C. 2000. Principles of corporate finance (6th ed.). Boston: Irwin/McGraw-Hill.
13. Chan, S. H., Kensinger, J. W., Keown, A. J., & Martin, J. D. 1997. Do strategic alliances create value? Journal of Financial Economics, 46: 199-221.
14. Chen, H. Y., Hu, M. Y., & Shieh, J. C. P. 1991. The wealth effect of international joint ventures: The case of U.S. investment in China. Financial Management, 20(4): 31-41.
15. Chi, T. 2000. Option to acquire or divest a joint venture. Strategic Management Journal, 21: 665-687.
16. Chi, T., & McGuire, D. J. 1996. Collaborative ventures and value of learning: Integrating the transaction cost and strategic option perspectives on foreign market entry. Journal of International Business Studies, 27: 285-308.
17. Contractor, F. J., & Lorange, P. 1988. Why should firms cooperate? The strategy and economics basis for cooperative ventures. In F. J. Contractor & P. Lorange (Eds.), Cooperative strategies in international business: 3-30. New York: Lexington.
18. Delios, A., & Henisz, W. J. 2000. Japanese firms' investment strategies in emerging economies. Academy of Management Journal, 43: 305-303.
19. Duncan, J. L. 1982. Impacts of new entry and horizontal joint ventures on industrial rate of return. Review of Economics and Statistics, 64: 339-42.
20. Dunning, J. H. 1995. Reappraising the eclectic paradigm in an age of alliance capitalism. Journal of International Business Studies, 26: 461-491.
21. Dyer, J. H., Kale, P., & Singh, H. 2004. When to ally and when to acquire. Harvard Business Review, 82(7-8): 108-115.
22. Erramilli, M. K. 1996. Nationality and subsidiary ownership patterns in multinational corporations. Journal of International Business Studies, 27: 225-248.
23. Folta, T. B. 1998. Governance and uncertainty: The tradeoff between administrative control and commitment. Strategic Management Journal, 19: 1007-1028.
24. Folta, T. B., & Miller, K. D. 2002. Real options and equity partnerships. Strategic Management Journal, 23: 77-88.
25. Gomes-Casseres, B. 1996. The alliance revolution. Cambridge, MA: Harvard University Press.
26. Greene, W. H. 2003. Econometric analysis (5th ed.). Upper Saddle River, NJ: Prentice-Hall.
27. Guillén, M. F. 2002. Structural inertia, imitation, and foreign expansion: South Korean firms and business groups in China, 1987-95. Academy of Management Journal, 45: 509-525.
28. Hagedoorn, J. 1993. Understanding the rationale of strategic technology partnering: Interorganizational modes of cooperation and sectoral differences. Strategic Management Journal, 14: 371-385.
29. Hall, B. H. 1993. The stock market's valuation of R&D investment during the 1980's. American Economic Review, 83: 259-264.
30. Hawawini, G., Subramanian, V., & Verdin, P. 2003. Is performance driven by industry- or firm-specific factors? A new look at the evidence. Strategic Management Journal, 24: 1-16.
31. Hitt, M. A., Ahlstrom, D., Dacin, M. T., Levitas, E., & Svobodina, L. 2004. The institutional effects on strategic alliance partner selection in transition economies: China versus Russia. Organization Science, 15: 173-185.
32. Hitt, M. A., Dacin, M. T., Levitas, E., Arregle, J.-L., & Borza, A. 2000. Partner selection in emerging and developed market contexts: Resource-based and organizational learning perspectives. Academy of Management Journal, 43: 449-467.
33. Hitt, M. A., Hoskisson, R. E., & Kim, H. 1997. International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40: 767-798.
34. Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. 2000. Strategy in emerging economies. Academy of Management Journal, 43: 249-267.
35. Hsiao, C. 2003. Analysis of panel data (2nd ed.). New York: Cambridge University Press.
36. Hurry, D., Miller, A. T., & Bowman, E. H. 1992. Calls on high-technology: Japanese exploration of venture capital investments in the United States. Strategic Management Journal, 13: 85-101.
37. Inkpen, A. C., & Beamish, P. W. 1997. Knowledge, bargaining power, and the instability of international joint ventures. Academy of Management Review, 22: 177-202.
38. Ireland, R. D., Hitt, M. A., & Vaidyanath, D. 2002. Alliance management as a source of competitive advantage. Journal of Management, 28: 413-446.
39. Janney, J. J., & Dess, G. G. 2004. Can real-options analysis improve decision-making? Promises and pitfalls. Academy of Management Executive, 18(4): 60-75.
40. Johanson, J., & Vahlne, J.-E. 1977. The internationalization process of the firm-A model of knowledge development and increasing foreign market commitments. Journal of International Rusiness Studies, 8: 23-32.
41. Kedia, B. L, & Bhagat, R. S. 1988. Cultural constraints on transfer of technology across nations: Implications for research in international and comparative management. Academy of Management Review, 13: 559-571.
42. Kester, W. C. 1984. Today's options for tomorrow's growth. Harvard Rusiness Review, 62(2): 153-160.
43. Khanna, T., & Palepu, K. 1997. Why focused strategies may be wrong for emerging markets. Harvard Rusiness Review, 75(4): 3-10.
44. Kim, D., & Kogut, B. 1996. Technological platforms and diversification. Organization Science, 7: 283-301.
45. Kogut, B. 1991. Joint ventures and the option to expand and acquire. Management Science, 37: 19-33.
46. Kogut, B., & Kulatilaka, N. 1994. Options thinking and platform investments: Investing in opportunity. California Management Review, 36(2): 52-71.
47. Kogut, B., & Kulatilaka, N. 2001. Capabilities as real options. Organization Science, 12: 744-758.
48. Koh, J., & Venkatraman, N. 1991. Joint venture formations and stock market reactions: An assessment of the information technology sector. Academy of Management Journal, 34: 869-892.
49. Lane, P. J., & Lubatkin, M. 1998. Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19: 461-477.
50. Li, J. T. 1995. Foreign entry and survival: Effects of strategic choices on performance in international markets. Strategic Management Journal, 16: 333-351.
51. Lyles, M. A., & Salk, J. E. 1996. Knowledge acquisition from foreign parents in international joint ventures: An empirical examination in the Hungarian context. Journal of International Rusiness Studies, 27: 877-903.
52. Marshall, A. 1890. Principles of economics. New York: Macmillan.
53. Matsusaka, J. G. 2001. Corporate diversification, value maximization, and organizational capabilities. Journal of Rusiness, 74: 409-431.
54. McGahan, A. M., & Porter, M. E. 1997. How much does industry matter, really? Strategic Management Journal, 18: 15-30.
55. McGrath, R. G. 1997. A real options logic for initiating technology positioning investments. Academy of Management Review, 22: 974-996.
56. McGrath, R. G. 1999. Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Review, 24: 13-30.
57. McGrath, R. G., Ferrier, W. J., & Mendelow, A. 2004. Real options as engines of choice and heterogeneity. Academy of Management Review, 29: 86-101.
58. McGrath, R. G., & Nerkar, A. 2004. Real options reasoning and a new look at the R&D investment strategies of pharmaceutical firms. Strategic Management Journal, 25: 1-21.
59. Miller, M. H., & Modigliani, F. 1961. Dividend policy, growth and the valuation of shares. Journal of Business, 34: 411-433.
60. Mitchell, G. R., & Hamilton, W. F. 1988. Managing R&D as a strategic option. Research-Technology Management, 27: 789-798.
61. Mjoen, H., & Tallman, S. 1997. Control and performance in international joint ventures. Organization Science, 8: 257-274.
62. Myers, S. C. 1977. Determinants of corporate borrowing. Journal of Financial Economics, 5: 147-175.
63. Myers, S. C. 1984. Finance theory and financial strategy. Interfaces, 14(1): 126-137.
64. Neter, J., Kutner, M. H., Nachtsheim, C. J., & Wasserman, W. 1996. Applied linear statistical models (4th ed.). Homewood, IL: Irwin.
65. Nohria, N., & Gulati, R. 1996. Is slack good or bad for innovation? Academy of Management Journal, 39: 1245-1264.
66. Pantzalis, C. 2002. Does location matter? An empirical analysis of geographic scope and MNC market valuation. Journal of International Business Studies, 32: 133-155.
67. Park, S. H., & Russo, M. V. 1996. When competition eclipses cooperation: An event history analysis of joint venture failure. Management Science, 42: 875-890.
68. Park, S. H., & Ungson, G. R. 1997. The effect of national culture, organizational complementarity, and economic motivation on joint venture dissolution. Academy of Management Journal, 40: 279-307.
69. Peng, M. W. 2000. Business strategies in transition economies. Thousand Oaks, CA: Sage.
70. Peng, M. W. 2003. Institutional transitions and strategic choices. Academy of Management Review, 28: 275-296.
71. Pisano, G. P. 1989. Using equity participation to support exchange: Evidence from the biotechnology industry. Journal of Law, Economics, and Organization, 5: 109-126.
72. Prahalad, C. K., & Lieberthal, K. 2003. The end of corporate imperialism. Harvard Business Review, 81(8): 109-117.
73. Raynor, M. E. 2000. Real organizations for real options: The limits of corporate contingency theory and the sources of corporate value added in hybrid diversifiers. Unpublished doctoral dissertation, Harvard University, Cambridge, MA.
74. Reuer, J. J., & Koza, M. P. 2000. Asymmetric information and joint venture performance: Theory and evidence for domestic and international joint ventures. Strategic Management Journal, 21: 81-88.
75. Reuer, J. J., & Leiblein, M. J. 2000. Downside risk implications of multinationality and international joint ventures. Academy of Management Journal, 43: 203-214.
76. Reuer, J. J., & Tong, T. W. 2005. Real options in international joint ventures. Journal of Management, 31: 403-423.
77. Rosenkopf, L., & Almeida, P. 2003. Overcoming local search through alliances and mobility. Management Science, 49: 751-766.
78. Singh, J. V. 1986. Performance, slack, and risk taking in organizational decision making. Academy of Management Journal, 29: 562-585.
79. Steensma, H. K., & Lyles, M. A. 2000. Explaining IJV survival in a transition economy through social exchange and knowledge-based perspectives. Strategic Management Journal, 21: 831-851.
80. Stewart, G. B. 1991. The quest for value: A guide for senior managers. New York: Harper.
81. Stopford, J. M., & Wells, L. T. 1972. Managing the multinational enterprise. New York: Basic Books.
82. Strebel, P. J. 1983. The stock market and competitor analysis. Strategic Management Journal, 4: 279-291.
83. Sundaram, A. K., & Black, J. S. 1992. The environment and internal organization of multinational enterprises. Academy of Management Review, 17: 729-757.
84. Tallman, S., & Li, J. T., 1996. Effects of international diversity and product diversity on the performance of multinational firms. Academy of Management Journal, 39: 179-196.
85. Tong, T. W., & Reuer, J. J. 2006. Firm and industry influences on the value of growth options. Strategic Organization, 4(1): 71-95.
86. Trigeorgis, L. 1996. Real options: Managerial flexibility and strategy in resource allocation. Cambridge, MA: MIT Press.
87. Vanhonacker, W. 1997. Entering China: An unconventional approach. Harvard Business Review, 75(2): 130-140.
88. Vassolo, R. S., Anand, J., & Folta, T. B. 2004. Non-additivity in portfolios of exploration activities: A real options-based analysis of equity alliances in biotechnology. Strategic Management Journal, 25: 1045-1061.
89. Wright, M., Filatotchev, I., Hoskisson, R., & Peng, M. W. 2005. Strategy research in emerging economies: Challenging the conventional wisdom. Journal of Management Studies, 42: 1-33.
90. Young, S. D., & O'Byrne, S. F. 2001. EVA and valuebased management. New York: McGraw Hill.
91. Zaheer, S., & Mosakowski, E. 1997. The dynamics of the liability of foreignness: A global study of survival in financial services. Strategic Management Journal, 18: 439-464.