The Comparative Effect of Subnational and Nationwide Cultural Variation on Subsidiary Ownership Choices: The Role of Spatial Coordination Challenges and Penrosean Growth Constraints

© 2015 Clark University. To shed more light on the spatial determinants of foreign entry mode decisions, I examine the comparative effect of cultural variation inside target countries and target subnational regions on firms’ choices between joint ventures (JVs) and wholly owned subsidiaries. Based on the notions of spatial coordination challenges and Penrosean growth constraints, I argue that foreign entries tend to have a subnational scope, causing ownership mode choices to be more sensitive to target-region cultural variation than to target-country cultural variation. Accordingly, I hypothesize that target-region cultural varation has a more positive effect on the chance of JV selection than target-country cultural variation. I also hypothesize that this will be especially so for initially relatively large subsidiaries and subsidiaries established through acquisitions. An analysis of 170 entries by Dutch firms into 90 regions in 35 countries lends support to my hypotheses and indicates that the dominant effect of subnational cultural variation is not absolute but is confined to subsidiaries with specific establishment characteristics.status: publishe

67. International investment arbitration: Winning, losing and why

This second edition of this publication provides an overview of important contemporary issues relating to foreign direct investment (FDI) and multinational enterprises for all those who are interested in this subject, but are not always in a position to follow diverse perspectives and what is being written in the various corners of this field. The contributions are grouped under the following headings: attracting FDI and its impact; the rise of emerging market investors; national policies; sustainable international investment; and international investment treaties and arbitration. The volume brings together all Perspectives published since the inception of this series until 2012.https://digitalcommons.wcl.american.edu/facsch_bk_contributions/1391/thumbnail.jp

67. International investment arbitration: Winning, losing and why

This second edition of this publication provides an overview of important contemporary issues relating to foreign direct investment (FDI) and multinational enterprises for all those who are interested in this subject, but are not always in a position to follow diverse perspectives and what is being written in the various corners of this field. The contributions are grouped under the following headings: attracting FDI and its impact; the rise of emerging market investors; national policies; sustainable international investment; and international investment treaties and arbitration. The volume brings together all Perspectives published since the inception of this series until 2012.https://digitalcommons.wcl.american.edu/facsch_bk_contributions/1391/thumbnail.jp