When do wholly owned subsidiaries perform better than joint ventures?

Strategic Management Journal

Volumn 34, Issue 3, 2013, Pages 317-337

  Chang, Sea Jin ^a   Chung, Jaiho ^b   Moon, Jon Jungbien ^b  

^a NATIONAL UNIVERSITY OF SINGAPORE   (Singapore)

^b Korea University   (South Korea)

Author keywords

entry mode choice; joint venture termination; subsidiary performance; transaction cost theory; wholly owned subsidiaries

Indexed keywords

ENTRY MODE; JOINT VENTURES; SUBSIDIARY PERFORMANCE; TRANSACTION-COST THEORY; WHOLLY OWNED SUBSIDIARIES;

PLANNING;

MANAGEMENT;

EID: 84872800248     PISSN: 01432095     EISSN: 10970266     Source Type: Journal    
DOI: 10.1002/smj.2016     Document Type: Article

References (51)

1. Anand J, Delios A,. 1997. Location specificity and the transferability of downstream assets to foreign subsidiaries. Journal of International Business Studies 28 (3): 579-603.
2. Arnold JM, Javorcik BS,. 2009. Gifted kids or pushy parents? Foreign direct investment and plant productivity in Indonesia. Journal of International Economics 79: 42-53.
3. Arrow KJ,. 1974. The Limits of Organization. W. W. Norton: New York.
4. Barkema HG, Bell JHJ, Pennings JM,. 1996. Foreign entry, cultural barriers, and learning. Strategic Management Journal 17 (2): 151-166.
5. Blodgett LL,. 1992. Factors in the instability of international joint ventures: an event history analysis. Strategic Management Journal 13 (6): 475-482.
6. Brouthers KD, Brouthers LE, Werner S,. 2003. Transaction cost-enhanced entry mode choices and firm performance. Strategic Management Journal 24 (12): 1239-1248.
7. Brouthers KD, Hennart J-F,. 2007. Boundaries of the firm: insights from international entry mode research. Journal of Management 33 (3): 395-425.
8. Chang SJ, Xu D,. 2008. Spillovers and competition among foreign and local firms in China. Strategic Management Journal 29 (5): 495-518.
9. Chow GC,. 1993. Capital formation and economic growth in China. Quarterly Journal of Economics 108 (3): 809-842.
10. Conyon MJ, Girma S, Thompson S, Wright PW,. 2002. The productivity and wage effects of foreign acquisition in the United Kingdom. Journal of Industrial Economics 50 (1): 85-102.
11. Dehejia RH, Wahba S,. 2002. Propensity score-matching methods for nonexperimental causal studies. Review of Economics and Statistics 84 (1): 151-161.
12. Delios A, Beamish PW,. 2001. Survival and profitability: the roles of experience and intangible assets in foreign subsidiary performance. Academy of Management Journal 44 (5): 1028-1038.
13. De Loecker J,. 2007. Do exports generate higher productivity? Evidence from Slovenia. Journal of International Economics 73: 69-98.
14. Dhanaraj C, Beamish PW,. 2004. Effect of equity ownership on the survival of international joint ventures. Strategic Management Journal 25 (3): 295-305.
15. DiMaggio PJ, Powell WW,. 1983. The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. American Sociological Review 48 (2): 147-160.
16. Doms ME, Jensen JB,. 1998. Comparing wages, skills, and productivity between domestically and foreign-owned manufacturing establishments in the United States. In Geography and Ownership as Bases for Economic Accounting, Baldwin R, Lipsey R, Richardson JD, (eds.). Chicago University Press: Chicago, IL; 235-258.
17. Doz YL,. 1996. The evolution of cooperation in strategic alliances: initial conditions or learning processes? Strategic Management Journal, Summer Special Issue 17: 55-83.
18. Dunning JH,. 1988. The eclectic paradigm of international production: a restatement and some possible extensions. Journal of International Business Studies 19 (1): 1-31.
19. Franko LG,. 1971. Joint Venture Survival in Multinational Corporations. Praeger: New York.
20. Gatignon H, Anderson E,. 1988. The multinational corporation's degree of control over foreign subsidiaries: an empirical test of transaction cost explanation. Journal of Law, Economics, and Organization 4: 305-336.
21. Girma S, Görg H,. 2007. Evaluating the foreign ownership wage premium using a difference-in-difference matching approach. Journal of International Economics 72: 97-112.
22. Hennart J-F,. 1982. A Theory of Multinational Enterprise. University of Michigan Press: Ann Arbor, MI.
23. Hennart J-F,. 1991. The transaction costs theory of joint ventures: an empirical study of Japanese subsidiaries in the United States. Management Science 37: 483-497.
24. Hennart J-F,. 2009. Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets. Journal of International Business Studies 40: 1432-1454.
25. Hennart J-F, Kim D-J, Zeng M,. 1998. The impact of joint venture status on the longevity of Japanese stakes in U.S. manufacturing affiliates. Organization Science 9: 382-395.
26. Hennart J-F, Park Y-R,. 1993. Greenfield vs acquisition: the strategy of Japanese investors in the United States. Management Science 39 (9): 1054-1070.
27. Imbens G, Wooldridge JM,. 2009. Recent developments in the econometrics of program evaluation. Journal of Economic Literature 47 (1): 5-86.
28. Johanson J, Vahlne J-E,. 1977. The internationalization process of the firm: a model of knowledgedevelopment and increasing foreign market commitments. Journal of International Business Studies 8: 23-32.
29. Kieso D, Weygandt J, Warfield T,. 2010. Intermediate Accounting (13th edn). Wiley: Hoboken, NJ.
30. Killing JP,. 1983. Strategies for Joint Venture Success. Praeger: New York.
31. Kogut B,. 1991. Joint ventures and the option to expand and acquire. Management Science 37 (1): 19-33.
32. Kogut B, Chang SJ,. 1996. Platform investments and volatile exchange rates: direct investment in the U.S. by Japanese electronic companies. Review of Economics and Statistics 78 (2): 221-231.
33. Leuven E, Sianesi B,. 2003. PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing, http://ideas.repec.org/c/boc/bocode/s432001. htmlversion3.1.5/ (21 November 2009).
34. Lin C, Png I,. 2003. Monitoring costs and the mode of international investment. Journal of Economic Geography 3 (3): 261-274.
35. MacGarvie M,. 2006. Do firms learn from international trade? Review of Economics and Statistics 88 (1): 46-60.
36. Madhok A,. 1997. Cost, value and foreign market entry mode: the transaction and the firm. Strategic Management Journal 18 (1): 39-61.
37. Nitsch D, Beamish PW, Makino S,. 1996. Entry mode and performance of Japanese FDI in Western Europe. Management International Review 36: 27-38.
38. Park S, Li S, Tse D,. 2006. Market liberalization and firm performance during China's economic transition. Journal of International Business Studies 37: 127-147.
39. Puck JF, Holtbrügge D, Mohr AT,. 2009. Beyond entry mode choice: explaining the conversion of joint ventures into wholly owned subsidiaries in the People's Republic of China. Journal of International Business Studies 40: 388-404.
40. Rajan RG, Zingales L,. 1998. Financial dependence and growth. American Economic Review 88 (3): 559-586.
41. Reuer JJ,. 2001. From hybrids to hierarchies: shareholder wealth effects of joint venture partner buyouts. Strategic Management Journal 22 (1): 27-44.
42. Reuer JJ, Tong TW,. 2005. Real options in international joint ventures. Journal of Management 31 (3): 403-423.
43. Reuer JJ, Zollo M, Singh H,. 2002. Post-formation dynamics in strategic alliances. Strategic Management Jounal 23 (2): 135-151.
44. Ries J, Globerman S, Vertinsky I,. 1994. The economic performance of foreign affiliates in Canada. Canadian Journal of Economics 27 (1): 143-156.
45. Rosenbaum PR, Rubin DB,. 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70 (1): 41-55.
46. Shaver JM,. 1998. Accounting for endogeneity when assessing strategy performance: does entry mode choice affect FDI survival? Management Science 44 (4): 571-585.
47. Smith J, Todd P,. 2005. Rejoinder. Journal of Econometrics 125: 365-375.
48. Wernerfelt B,. 1984. A resource-based view of the firm. Strategic Management Journal 5 (2): 171-180.
49. Williamson OE,. 1991. Comparative economic organization: the analysis of discrete structural alternatives. Administrative Science Quarterly 36: 269-296.
50. Woodcock CP, Beamish PW, Makino S,. 1994. Owner-ship-based entry mode strategies and international performance. Journal of International Business Studies 25 (2): 253-273.
51. Yiu D, Makino S,. 2002. The choice between joint venture and wholly owned subsidiary: an institutional perspective. Organization Science 13: 667-683.