Explaining the swollen middle : why most transactions are a mix of "market" and "hierarchy" / 1991:120

Includes bibliographical references (p. 38-42

Greenfield or Acquisition Entry: A Review of the Empirical Foreign Establishment Mode Literature

This paper reviews the empirical literature on the determinants of the choice by multinational enterprises between entering foreign countries through greenfields or acquisitions. We discuss and compare the main theoretical perspectives used, provide a detailed overview of the empirical findings, examine why these findings have often been inconsistent, and offer theoretical and methodological suggestions to guide future research

What drives cross-border M&As in commercial banking?

Using a gravity model, we analyze the determinants of the probability that commercial banks in 89 acquiring countries and 118 target countries will undertake M&As over a 30-year period (1981–2010) and of the value of these M&As. We find that the value of cross-border M&As increases with the size of the acquiring country, and that both the probability and value of M&As vary positively with the depth of the financial market in acquirer countries and the presence of corporate and non-corporate customers from acquiring countries in target countries, and negatively with the geographic, psychic, and time zone distances between acquirer and target countries. Our study highlights the role of non-corporate customers and of psychic distance in the cross-border expansion of commercial banks through M&As.info:eu-repo/semantics/publishedVersio

Control in multinational firms : an economic perspective / 1684

Includes bibliographical references (p. 40-43)

The Transaction Costs Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States

This paper offers the first large sample empirical study of the factors which influence the choice of Japanese firms between full or partial ownership of their U.S. manufacturing subsidiaries. It studies for the first time the ownership policies of investors of a single home country in a single host country, thus keeping variations within home and host countries constant. One methodological improvement over previous studies is the use as independent variables of the relevant characteristics of the investing firms. These had been proxied in previous studies by data on U.S. industries entered. The results suggest that the degree of ownership taken by Japanese manufacturing investors in their American subsidiaries is driven by the same general transaction costs variables that determine the choices made by their U.S. counterparts: Japanese parents joint venture when they need to combine with other firms intermediate inputs which are subject to high market transaction costs. An intriguing result, however, is the lack of significance of two variables which, in the U.S. case, strongly push towards full control of foreign subsidiaries. In this study neither the Japanese parent's R&D nor its advertising intensities had any significant impact on their ownership policies.joint ventures, transaction cost theory, control, multinational enterprises

Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets

Both Anderson and Gatignon and the Uppsala internationalization model see the initial mode of foreign market entry and subsequent modes of operation as unilaterally determined by multinational enterprises (MNEs) arbitraging control and risk and increasing their commitment as they gain experience in the target market. OLI and internalization models do recognize that foreign market entry requires the bundling of MNE and complementary local assets, which they call location or country-specific advantages, but implicitly assume that those assets are freely accessible to MNEs. In contrast to both of these MNE-centric views, I explicitly consider the transactional characteristics of complementary local assets and model foreign market entry as the optimal assignment of equity between their owners and MNEs. By looking at the relative efficiency of the different markets in which MNE and complementary local assets are traded, and at how these two categories of assets match, I am able to predict whether equity will be held by MNEs or by local firms, or shared between them, and whether MNEs will enter through greenfields, brownfields, or acquisitions. The bundling model I propose has interesting implications for the evolution of the MNE footprint in host countries, and for the reasons behind the emergence of Dragon MNEs

The Accidental Internationalists: A Theory of Born Globals

The distinguishing characteristic of international new ventures/born globals (INVs/BGs) is that they have foreign sales from the outset, or very quickly afterward. I argue that this is due to their business model. INVs/BGs sell to spatially dispersed customers distinctive niche products that incur low communication, transportation, and adaptation costs. In contrast to the firms described by the Uppsala model, selling to foreign customers does not require additional time or effort for INVs/BGs. Thus INVs/BGs can be seen as accidental internationalists

Alliance Research: Less is More

Bell et al. (2006) express dissatisfaction with academic research on alliances and suggest ways in which it could be improved. While much of the literature has delved on alliance structure, they think it should analyse processes by which alliances evolve, what they call the dynamics of cooperation. Unfortunately, they find that this literature lacks coherence and is useless to managers. I agree with them that the present dynamics of cooperation literature leaves much to be desired, but I am pessimistic as to its chances of ever providing parsimonious and managerially useful theories. Re-visiting four cases of alliance evolution that have been featured in the dynamics of cooperation literature, I show that focusing instead on alliance structure, in the broad sense of the term, is likely to yield strong testable propositions and useful managerial prescriptions. Copyright Blackwell Publishing Ltd 2006.