economies of scale in multi product firms an empirical analysis this paper presents new evidence on scale economies in multiproduct firms previous studies are limited in view of r ecent advances in the theory of the multiproduct firm the water util ity is chosen here as a multiproduct firm providing multiple services to various classes of customers with spatial variation a translog m ultiproduct cost function is estimated based on duality between tran sformation and cost functions the paper analyzes overall as well as product specific scale economies it also discusses ray average cos t curves and derives the m locus which provides useful information on scope economies and the cost minimizing number of firms copyright 1987 by the review of economic studies limited

the effects of ownership and benchmark competition an empirical analysis of u s water systems abstract should governments or private firms own water systems can yardstick or benchmark competition effectively discipline utilities little empirical research sheds light on these issues we use a panel dataset that includes every community water system in the united states from 1997 to 2003 to test the effects of ownership and benchmark competition on regulatory compliance we find that ownership does not generally affect compliance with the safe drinking water act sdwa greater benchmark competition however is associated with fewer sdwa violations the results suggest that ownership per se may not matter much but that competition even in its weaker form of benchmarking by consumers or regulators can improve performance

does private management of water supply services really increase prices an empirical analysis in spain this paper attempts to explain differences in the average price of domestic water supply services in spain paying special attention to the effects of privatisation of the service on price levels the empirical analysis is based on the application of a treatment effects model on a sample of 53 major urban municipalities this model accounts for the fact that municipalities do not randomly distribute themselves between a group using strictly public ownership and management and a group where all or part of the service has been delegated to a private firm it is found that once this endogeneity is taken into account there seems to be a positive and significant effect of privatisation on water price levels

balancing hunting regulations and hunter satisfaction an integrated biosocioeconomic model to aid in sustainable management hunting of game animals needs to be regulated either through the number of permits or the bag size allowed per hunter such regulations may however jeopardize hunter satisfaction on which game managers depend consequently finding the optimal hunting intensity is not straightforward using data from norwegian grouse hunting we show that an integrated approach combining sociology and bioeconomics can give markedly different priorities than an optimization based exclusively on bioeconomics three grouse hunter typologies with contrasting stated preferences regarding bag size and crowding were used to account for varying hunter behavior omitting the social constructs from the model pushed the hunter density towards its upper limit because the gain of selling one more permit generally superseded the loss in hunter satisfaction expressed as willingness to pay although this strategy multiplied the overall profit it produced a daily bag size that would be unacceptable to practically all hunters we conclude that biosocioeconomic modeling is a valuable tool in the pursuit of sustainable game management

partner nationality and the structure performance relationship in strategic alliances the dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business indeed interfirm cooperation has become a crucial component of the pursuit of global competitive advantage yet such alliances are enormously complex to manage successfully in part because of the opportunity and incentive to cheat and profit at the partner s expense that is an inescapable part of these relationships consequently strategic alliances are frequently subject to high instability poor performance and premature dissolution thus an important question arises is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies incentives this question is addressed empirically in the present paper using recent work in game theory which suggests that high performance is linked to specific elements of the alliance structure further this study applies insights from international business literature suggesting th

japanese and local partners commitment to ijvs psychological consequences of outcomes and investments in the ijv relationships this study investigated the antecedents of commitment in ijvs from the major partners perspective data were gathered from japanese and local partners in ijvs located in eleven countries and analyzed in structural equations models results indicated that commitment is largely a function of the perceived benefits of the relationship i e satisfaction and economic performance however exploration analyses of differences between local partners and the japanese suggest that the effects of psychological antecedents might be contingent on the strategic intent of the relationship

ownership based entry mode strategies and international performance this study examines the relationship between ownership entry modes and performance the ownership entry modes examined are the wholly owned modes of acquisition and new venture entry and the non wholly owned mode of joint venture entry a theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors this model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands the theoretical model although developed using the eclectic theoretical approach is based largely on concepts and relationships previously delineated in contingency theory our hypotheses suggest that new ventures should outperform joint ventures and joint ventures should outperform acquisitions an empirical test using a sample of 321 japanese firms entering the north american market provides supporting evidence

how different is the efficiency of public and private water companies in asia several studies have compared the efficiency of publicly and privately owned water utilities and reached conflicting conclusions on the impact of ownership on efficiency this article provides further evidence by estimating a stochastic cost frontier for a sample of asian and pacific regional water companies the results show that efficiency is not significantly different in private companies than in public ones

the role of key stakeholders in the international joint venture negotiations case studies from eastern europe recent literature has suggested that a key stakeholder may be able to shift the balance of bargaining power during a joint venture negotiation and thus change the outcome of the process this paper explores the role of central and eastern european transitional governments as key stakeholders and how they influence international joint venture negotiations this role is described and analyzed by examining eight dyads of western european and central eastern european enterprises that have recently negotiated agreements the findings suggest that transitional governments as key stakeholders intervene at different stages of the negotiation process have both direct and indirect influences on the process and that they can change the balance of power in the negotiations sometimes to the detriment of their own state owned enterprise

foreign entry cultural barriers and learning this paper examines the longevity of foreign entries hypotheses are developed on the mode start ups vs acquisitions and ownership structure wholly owned vs joint ventures in relation to cultural distance the hypotheses are tested within a framework of organizational learning using data on 225 entries that 13 dutch firms carried out from 1966 onwards results show that the presence of cultural barriers punctuates an organization s learning cultural distance is a prominent factor in foreign entry whenever this involves another firm requiring the firm to engage in double layered acculturation we also identify locational paths of learning the longevity of acquisitions is positively influenced by prior entries of the firm in the same country similarly the longevity of foreign entries in which the firm has a majority stake improves whenever the expanding firm engaged in prior entries in the same country and in other countries in the same cultural block

bargaining power ownership and profitability of transnational corporations in developing countries as the bargaining power of the transnational corporations tncs in the sample increased relative to the bargaining power of the host country and as the desire of the tncs for a high level of equity ownership increased the percent equity ownership of the tncs in their subsidiaries increased the relationship between percent equity ownership and subsidiary success from the tncs viewpoint however was j shaped high and low levels of equity ownership were associated with high levels of success control of critical operational variables by the tnc was directly related to success

the choice between joint venture and wholly owned subsidiary an institutional perspective the study of foreign entry mode choice has been based almost exclusively on transaction cost theory this theory focuses mainly on the impacts of firm and industry specific factors on the choice of entry mode taking the effects of country specific contextual factors as constant or less important in contrast the institutional perspective emphasizes the importance of the influence of both institutional forces embedded in national environments and decision makers cognitive constraints on the founding conditions of new ventures still this theoretical perspective has yet to provide insights into how institutional factors influence the choice of foreign entry mode the primary goal of the present study is to provide a unifying theoretical framework to examine this relationship we synthesize transaction cost and institutional perspectives to analyze a sample of 364 japanese overseas subsidiaries our results support the notion that institutional theory provides incremental explanatory power of foreign entry mode choice in addition to transaction cost theory in particular we found that multinational enterprises tend to conform to the regulative settings of the host country environment the normative pressures imposed by the local people and the cognitive mindsets as bounded by counterparts and multinational enterprises own entry patterns when making foreign entry mode choices

hedonic cost models and the pricing of milk components to assess likely producer response to milk price reform we examine the technology of protein butterfat and fluid carrier production on 1 924 u s dairy farms a variant of a hedonic cost model is proposed in which the output aggregator is expressed as a function of total output and of the percentage concentrations of its components dairy farmers have responded rationally to artificially low protein prices due to the cow s appetite limit farmers operate in stage i of feed to milk production functions yet protein s marginal cost rises sharply with protein output only modest substitutability is evident among feed inputs or milk component outputs

use of minority and 50 50 joint ventures by united states multinationals during the 1970s the interaction of host country policies corporate strategies this article examines geographical sectoral and corporate trends in the use of minority and 50 50 joint ventures by u s multinational manufacturing and mining firms in less developed countries ldcs during the 1970s it is based primarily on data found in the harvard multinational enterprise data base as updated through the mid 1970s and supplemented with corporate performance data for the 1975 1980 period from a new international competitive analysis ica database developed with support from the general electric foundation

nationality and subsidiary ownership patterns in multinational corporations this paper examines the notion that the multinational s nationality influences its foreign subsidiary ownership decisions it identifies theoretically meaningful constructs to represent nationality and examines under carefully controlled conditions their influence on subsidiary ownership preferences in american and european multinationals the paper concludes that there are indeed significant differences in ownership preferences among various nationalities that can be explained using cultural as well as economic variables but that these differences may become weaker in larger multinationals

local knowledge transfer and performance implications for alliance formation in asia foreign firms in host country environments frequently face location based disadvantages this study proposes three means channels of overcoming local knowledge disadvantages based on a sample of 558 japanese joint ventures jvs located in southeast and east asia we find that partnering with local firms the first channel can be a primary strategy for accessing local knowledge and improving jv performance jv experience in the host country the second channel also mitigates local knowledge disadvantages and leads to increased jv performance the third channel the foreign parent s host country experience leads to increased performance in the absence of a local partner however when a jv is formed with a local partner increased parent experience in the host country leads to decreased performance suggesting that the need for a local partner declines as parent experience in a host country increases

host market government corruption and the equity based foreign entry strategies of multinational enterprises while extant theory suggests that the pervasiveness of host market government corruption should influence the equity ownership decisions of foreign investing multinational enterprises mnes empirical research has produced inconclusive results we leverage insights from transaction cost economics to advance an uncertainty oriented framework which can be used to explain the impact of host market government corruption on the equity based entry strategies of mnes we disaggregate government corruption into two distinct components grand corruption and petty corruption we propose that grand and petty corruption precipitate different types of uncertainty environmental and behavioral which motivate mnes to vary their equity based foreign entry strategies entry mode and partnering hypotheses pertaining to the entry strategies of mnes under conditions of more pervasive grand and petty corruption are developed and tested with a sample of 643 japanese investments in 30 countries between 2004 and 2007 we find that the main effect of grand corruption and the interaction between grand and petty corruption significantly impact a mne s entry mode further while more pervasive grand corruption increases the likelihood that a mne will engage in a joint venture investment with a host country partner we find that an increase in petty corruption heightens a mne s preference to invest with a home country partner

gratitude nostalgia and what now knowledge acquisition and learning a decade later we look at the development of absorptive capacity organizational learning and ijv research literatures since 1996 using our 1996 jibs paper as our centering point taking stock of the timing and patterns of citations to this paper opened up a unique window across time venues and topics this permitted us to more clearly position the paper vis a vis the contemporary corpus of the different literatures that provided the original context and impetus for us in the early 1990s the paper has been embraced and carried forward by the burgeoning community of international business ib scholars on transitional economies and on ijvs although the hungarian setting circa 1989 early 1990s was one we tended to view as a context to address and test theory based issues and assumptions from a broader management literature most indications of outward diffusion of our ideas beyond the ib community have been recent indeed over half the citations have occurred after 2003 we project our take on the current landscape toward the future providing suggestions about research opportunities

will a second mouse get the cheese learning from early entrants failures in a foreign market we examine the conditions that can facilitate or hinder the effectiveness with which a new entrant learns from the failures of prior entrants by analyzing the experiences of 822 japanese subsidiaries in china founded between 1979 and 2000 our conceptual arguments and empirical findings demonstrate that learning from the failure experiences of prior entrants increases a new entrant s survival chances when entering china further we find that the value of this learning is less effective when there is a greater level of heterogeneity in the causes of these failures however this learning is more effective when a new entrant s parent firm has ownership ties with investors who had ventures that failed previously in china

signaling and the design of delegated management contracts for public utilities this article analyzes the shape of contracts between local governments and the contractors they hire to run public facilities on their behalf governments are privately informed about the quality of the facility while risk neutral contractors undertake a non verifiable operating eort the design of the contract signals the quality of the facility in such a way that the better this quality the greater the share of operating risk kept by the government this feature reduces the agent s marginal incentives creating a trade o between signaling and moral hazard we provide extensions of our framework in several directions allowing for risk aversion on the agent s side double moral hazard and political delegation the model is supported by some stylized facts from the water industry

partner selection and venturing success the case of joint ventures with firms in the people s republic of china it has been hypothesized in the international joint venture ijv literature that partner selection affects interpartner fit which in turn influences a synergistic effect on ijv performance this study investigates the relationship between ijv success and the strategic and organizational traits of local partners we address this issue in the context of an emerging economy p r china newly emerging economies have in recent years become major hosts of direct investment by multinational corporations mncs because these rapidly expanding economies characterized by an exploding demand previously stifled by ideologically based government intervention provide tremendous opportunities which mncs can preempt mncs in such economies however face the challenges of structural reform weak market structure poorly specified property rights and institutional uncertainty right local partners can help mncs boost market expansion obtain insightful information mitigate operational risks and provide country specific knowledge the analysis of the data obtained from china suggests that both strategic and organizational traits of local partners are significantly associated with some individual dimensions of ijv performance among strategic traits absorptive capacity product relatedness and market power are favorable to ijvs market and financial outcomes market power and experience significantly reduce ijvs operational uncertainties of organizational traits international experience and organizational collaboration are important for ijvs not only profitability and stability but also local market expansion and export growth organizational form and size influence ijvs local market performance the findings provided by this study can help mncs determine what criteria they should use in opting for local partners and what criteria are vital to their goal accomplishment those investors seeking local market expansion should select those local partners that have rich market experience superior market position high absorptive capacity and related product diversification with the ijvs those seeking profitability and stability should select local firms that have superior international experience longer organizational collaboration and greater market power while mncs should use appropriate strategic and organizational criteria to select local partners the host government or local firms can try to make these traits available to attract more stable and profitable foreign direct investment

partner contributions as predictors of equity share in international joint ventures the type of expertise that a company contributes to a joint venture may affect the amount of equity that it owns this research observes the ownership patterns associated with four common combinations of partner expertise in international joint ventures the results rank company assets with respect to the contributor s ability to negotiate majority ownership in the original joint venture contract and that company s tendency to buy up equity from the partner later on

the stability of joint ventures reciprocity and competitive rivalry the focus of the following empirical analysis is the influence of reciprocity and long term relationships on the stability of joint ventures these cooperative incentives are offset by industry structural conditions which may promote competitive rivalry among the partners to separate these effects on joint venture survival the hypothesized relationships are proxied by variables drawn from industry and questionnaire data and estimated under a hazard model specification a theoretical implication of the findings is to suggest a shift of attention from the transaction to the economic relationship as the unit of analysis copyright 1989 by blackwell publishing ltd

the trap of continual ownership change in international equity joint ventures this article examines how multiple ownership changes unfold in international equity joint venture iejv evolution and how such repeated changes impact short term performance and long term survival by theorizing a new concept the trap of continual change in the iejv context we challenge the adaptive viewpoint assumed in alliance dynamics research we propose that partners sometimes respond to an initial dissatisfaction with the venture result with a dysfunctional repetition of rearranging the ownership control structure this continual change locks the organization into bad choices and sends it into a downward spiral acknowledging the mixed motive nature of inter partner relationships we incorporate cooperative versus competitive dynamics manifested in shared control arrangements we propose that shared ownership control lends stability to the iejv until the initial iejv agreement is renegotiated this stability is a result of the cooperative forces of mutual interdependence and mutual forbearance between the partners however when the power balance breaks down the potential for inter partner conflict increases when the ownership control structure of the iejv is restructured especially multiple times shared control arrangements become increasingly unstable as behavioral cultural and managerial differences are amplified

strategic determinants of partner selection criteria in international joint ventures prior studies are vague regarding determinants of criteria for selecting complementary partners for international joint ventures ijvs this paper first distinguishes task and partner related dimensions of selection criteria the paper then argues that relative importance of task related selection criteria is determined by the strategic context of the proposed ijv and the parent firm specifically the critical success factors of the venture s competitive environment and the parent s static and dynamic position vis a vis these factors

learning from age difference interorganizational learning and survival in japanese foreign subsidiaries this paper extends research on experiential learning of foreign subsidiaries by exploring the temporal conditions under which a foreign subsidiary can benefit from the experience of its sister subsidiaries building upon organizational evolution and learning literature we propose that differences in entry timing among sister subsidiaries provide structural conditions that bound the opportunities for inter subsidiary learning we argue that different entry cohorts of sister subsidiaries are beneficial to a focal subsidiary as they provide non redundant complementary experience from their different operational stages and ignite the motivation to learn our empirical analysis of japanese foreign subsidiaries provides strong evidence that survival is enhanced by the experience of different entry cohorts of sister subsidiaries but not by that of similar cohorts qualitative evidence also shows that multiple channels of experience exchange across sister subsidiaries lead to actual learning we further show that the survival benefit derived from different cohorts is contingent on the level of environmental change as well as on the level of experience of the focal subsidiary and its parent firm our research highlights the importance of temporal heterogeneity in the internationalization process and offers implications for the temporal strategy of multinational companies

performance and survival of joint ventures with non conventional ownership structures the international joint venture jv literature has focused on two parent jvs formed between one foreign and one local firm yet other types of jvs exist this paper identifies four distinct forms of jvs based on the jv partners nationality and equity affiliation these are i jvs that are formed between affiliated home country based firms ii jvs that are formed between unaffiliated home country based firmsl iii jvs that are formed between home country based and local firms and iv jvs that are formed between home country and third country based firms our analysis of 737 japanese jvs in asia demonstrates that the conventionally assumed form of jv represented only 30 percent of the total further each of the four jv forms significantly differed in terms of incidence performance and survival likelihood

the characteristics and performance of korean joint ventures in ldcs little has been reported on joint ventures between firms from newly industrialized countries and developing countries this paper examines twelve characteristics of a sample of korean firms with partners in developing countries ldcs and contrasts them with existing research where a developed country firms have linked with firms in other developed countries and b developed country firms have linked with local firms in developing countries as part of the analysis ten hypotheses were formulated and tested

intra and inter organizational imitative behavior institutional influences on japanese firms entry mode choice this paper compares the predictions of transaction cost and institutional theories in an empirical study of the entry mode choice for 1 194 japanese foreign subsidiaries the findings indicate the institutional model adds significant explanatory power over and above the predictions of the transaction cost model using the concepts of frequency based trait based and outcome based imitation i find support for institutional isomorphism as later entrants tended to follow the entry mode patterns established by earlier entrants isomorphic behavior was also present within a firm as firms exhibited consistency in entry mode choices across time further a firm s investment experience moderated institutional influences on entry mode choice

control and performance in international joint ventures the authors examine the meaning of control in international joint ventures ijvs and the relationships of potential means of control in such organizations to the performance satisfaction of the foreign partner they propose a conceptual model that provides both a traditional ownership focused internalization perspective on those issues and an integrated approach combining a broader transaction cost interpretation of control with a resource input based bargaining power model a set of simultaneous structural equations with endogenous explanatory variables provides multiple possible paths from various resource and power inputs through different means of control to perceived performance satisfaction in such a model intermediate variables act both as dependent and independent variables thus the complex theoretical interactions of the variables are modeled more comprehensively and realistically than in single equation models to test the model and compare the theoretical relationships the authors used dat

the experience factor in foreign market entry behavior of service firms the paper examines the effect of international experience on service firms selection of foreign markets and entry modes the investigation utilizes survey date from 151 united states based service firms results on market selection suggest that as their experience increases and becomes geographically more diversified service firms tend to choose markets that are culturally less similar to their home country on entry mode choice the paper departs from traditional linear conceptualizations and hypothesizes a u shaped relationship between experience and propensity for integrated entry modes results generally support the hypothesis the paper explains these findings and describes how service firms resemble and differ from manufacturing firms in their foreign market entry behavior

an assessment of the measurement of performance in international business research a sizeable body of international business ib research is devoted to building knowledge about the determinants of organizational performance a key precursor to accurately diagnosing why some organizations succeed in the international marketplace while others struggle is operationalizing performance appropriately yet to date no systematic investigation has considered how well ib research measures performance we examine the measurement of performance in 96 articles published in the academy of management journal administrative science quarterly journal of marketing journal of marketing research journal of international business studies management science organization science a nd thestrategic management journal between 1995 and 2005 the findings reveal that most studies do not measure performance in a manner that captures the multifaceted nature of the construct we describe the implications of these results and offer suggestions for improving future practice journal of international business studies 2008 39 1064 1080

costs of nitrogen runoff for rural water utilities a shadow cost approach this paper explores the interactions among scale and density economies productive efficiency water quality and customer characteristics and their impact on the costs of delivering treated drinking water implicit benefits of nitrogen abatement are also derived and hypothesis tests concerning their hypothesized drivers are conducted key findings are that nitrogen removal costs increase with rising raw water nitrogen concentration coming from agricultural activities and that network density and system size matter in determining average total costs of community water systems merging water systems to take advantage of scale economies may be difficult due to the heterogeneity of the sector however

role conflict and role ambiguity of chief executive officers in international joint ventures this study examines the organizational and personal correlates of role conflict and role ambiguity of chief executive officers heading international joint ventures role conflict was found to be lower when the number of parent firms was higher and when the ceo had spent more years with the organization role ambiguity was found to be lower when the ceo had more years of education when the power distance and masculinity femininity gap between parents were lower and when the individualism collectivism and uncertainty avoidance gaps were higher the implications of these findings for role theory and international management are discussed

the effects of consolidation amongst japanese water utilities a hedonic cost function analysis in many parts of the world water is supplied by very small local undertakings in recent years there has been a move to consolidation of these utilities in a number of countries this paper look

interfirm diversity organizational learning and longevity in global strategic alliances organizational theorists have correctly argued that the emergence and maintenance of robust cooperation between global strategic alliance partners is related to the diversity in the partners characteristics yet previous research has failed to systematically delineate the important dimensions of interfirm diversity and integrate the dimensions into a unified framework of analysis this paper develops a multilevel typology of interfirm diversity and focuses on organizational learning and adaptation as critical processes that dynamically moderate diversity s impact on alliance longevity and effectiveness

bargaining power of multinationals and host governments one of the outcomes of negotiation between multinationals and host governments in developing countries the extent of foreign ownership of subsidiaries is influenced by the bargaining power of the two parties foreign ownership measured in various ways appears to be affected by the level of technology of the multinational the degree to which a multinational attempts to differentiate its products the extent to which a subsidiary s output is exported to other parts of the multinational the diversity of products offered by the multinational and the extent of competition by other multinationals the relationship between some of these variables and ownership is not a simple one one variable that others have mentioned as probably affecting bargaining power size of the investment in question appears not to play a significant role in government policies toward ownership but many large projects tend to be located in countries that have lenient ownership policies

ownership patterns of u s joint ventures abroad and the liberalization of foreign government regulations in the 1980s evidence from the benchmark surveys data from the benchmark surveys of the commerce department show the beginning of a global liberalization in government restrictions on foreign equity in the 1980s this was manifested in a small but unmistakable across the board reduction in the share of 50 50 and minority affiliates out of all u s affiliates in a country across countries there remains a huge variation in this proportion and the second part of the paper seeks to statistically explain this variation in a cross sectional regression analysis

ownership versus competition efficiency in public enterprise certainly the introduction of product market competition into potentially competitive or at least contestable markets can improve performance to take just one example morrison and whinston 1986 1986 estimate that even in the imperfectly contestable u s airline industry the annual u s welfare gains from deregulation have been around 6 billion

the role of environmental factors in water utilities technical efficiency empirical evidence from spanish companies this article computes input specific scores of technical efficiency for a sample of water utilities located in the southern spanish region of andalusia in addition differences in efficiency between different operating environments are investigated concerning the debate about ownership and efficiency we find that privately owned companies outperform public utilities in their management of labour furthermore technical efficiency is found to be greater among firms located in highly populated areas and for utilities providing water services to tourist municipalities finally no empirical evidence supporting the greater technical efficiency of consortia of water utilities a managerial strategy strongly encouraged by regional politicians is found

efficiency and equity in natural resources pricing a proposal for urban water distribution service this paper focuses on the design of optimal prices for urban water distribution service in this context pricing should be aimed at achieving efficiency equity financial aspects and or public acceptability and transparency the proposed tariffs are based on the theoretical frameworks suggested by ramsey 1927 and feldstein 1972 as a prior step estimations of urban water demands and water costs are carried out for the spanish municipality of seville finally an empirical comparison in welfare terms is conducted between the proposed tariffs and those applicable in the year 2000

starting point bias in dichotomous choice valuation with follow up questioning abstract follow up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires however a number of authors e g 12 16 have noted a significant difference between the wtp distributions implied by initial and follow up question responses this paper investigates starting point bias as one explanation for the phenomenon we develop a model of starting point bias in the context of dichotomous choice questioning with follow up using a monte carlo simulation to illustrate the potential bias imparted to wtp estimates an application is provided based on data from a cv study in northcentral iowa

cooperative strategies between foreign firms in an overseas country in this paper we study the cooperative strategies between two firms in an overseas country in part 1 we examine the circumstances under which foreign firms would cooperate with another foreign firm in a third country market drawing upon existing literature we develop and test a set of hypotheses using a longitudinal data set from china the types of cooperative arrangements include all the major modes of operation in part 2 we further investigate what types of operation and level of control exist among the cooperative arrangements between two foreign firms in china we used a sample of 483 cooperative arrangements between two firms from hong kong the u s japan germany or britain this study offers interesting insight as to why foreign firms form cooperative arrangements in an overseas country and what types of cooperative arrangements these firms prefer

the contingent effect of state participation on the dissolution of international joint ventures a resource dependence approach we adopt a resource dependence approach to explain the effect of state participation on the dissolution of international joint ventures ijvs while resource dependence theory rdt has been used to explain the formation of ijvs we propose an extension of the theory to explain their dissolution we do so by highlighting the match between foreign firms resource needs resource hierarchy and the resource provision roles of state controlled vs private local partners resource profiles we further argue that the effect of state participation on the dissolution of ijvs is moderated by foreign firms host country experience and ijv age we test our hypotheses by using data on 623 ijvs in china our results show that state participation reduces the risk of ijv dissolution and that the strength of this effect differs depending on the type of state controlled actor that is involved in an ijv we also find that host country experience and ijv age moderate the effect of state participation on ijv dissolution these findings enhance our understanding of ijv dissolution and contribute to the development of rdt

technical efficiency within the us postal service and the postal reorganization act of 1970 1988 technical efficiency within the us postal service and the postal reorganization act of 1970 applied economics vol 20 no 9 pp 1185 1197

equity joint ventures and the theory of the multinational enterprise this paper extends the internalization approach to the theory of the multinational enterprise mne to include an expanded role for equity joint ventures using the transaction cost paradigm of williamson this paper explains why joint ventures may sometimes be preferred over wholly owned subsidiaries also presented is empirical work on joint venture performance in developing countries which demonstrates that under certain conditions joint ventures can be the optimal mode of foreign direct investment

interdependent behavior in foreign direct investment the multi level effects of prior entry and prior exit on foreign market entry this paper examines the interdependent foreign market entry decisions of multinational corporations mncs based on the argument that legitimacy and competition are two important forces in foreign market entry decisions we hypothesize that an mnc s market entry decisions are influenced by its own prior entry and prior exit decisions and those of other mncs we examine this general proposition at four levels of analysis the host country global industry an industry that spans host countries local industry an industry that is separately defined within each host country and parent firm level our analysis of a panel data of over 4000 market entry decisions that were made by japanese mncs shows that an mnc s market entry decision has a stronger inverted u shaped relationship with the prior entry and exit decisions of other mncs at the local industry level than the prior entry and exit decisions of other mncs at the host country and global industry levels we also find that both the prior entry and prior exit decisions of an mnc have a marginal influence on its own subsequent market entry decisions at the parent firm level

multinational corporation internationalization in the service sector a study of japanese trading companies this paper extends chang s 1995 sequential investment theory to include multinational corporations mncs in service industries given this sector s large and growing impact on the global economy to facilitate an examination of service mnc internationalization patterns we develop a new typology of service investment i e core global related local unrelated global and unrelated local based on business relatedness and location specificity we test this typology on a sample of large japanese trading companies our results suggest that the initial investments of service mncs are closely related to their core businesses and are less location specific but that subsequent investments are less related to firms core services and are more location specific a pattern similar to the traditional view on manufacturing mncs we extend our analysis to examine several case studies to provide a richer context for these findings in addition we examine the performance implications of internationalization our findings suggest that firms that internationalize through early investments that are closely related to their core activities outperform those in unrelated businesses over time but that this performance gap between related and unrelated foreign investments diminishes in more advanced stages of internationalization

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

public versus private water delivery a hedonic cost approach automotive news 1967 almanac detroit slocum publishing co 1967 bucklin louis p competition and evolution in the distributive trades englewood cliffs new jersey prentice hall 1972 federal trade commission annual line of business report 1974 washington ftc 1981a processed annual line of business report 1975 washington ftc 1981b processed guth louis a robert a schwartz and david k whitcomb the use of buyer concentration ratios in tests of oligopoly models this review 58 nov 1976 488 491 jeifreys james b the distribution of consumer goods new york cambridge university press 1950 lilly digest indianapolis ely lilly and co 1976 martin stephen advertising concentration and profitability the simultaneity problem belljournal 10 autumn 1979 639 647 national petroleum news fact book 1976 new york mcgraw hill 1976 ncr expenses in retail business dayton ohio ncr undated but about 1966 and about 1976 strickland allyn d and leonard w weiss advertising concentration and price cost margins journal of political economy 84 oct 1976 1109 1123 u s department of commerce bureau of economic analysis the detailed input output structure of the u s economy 1972 volume 1 the use and make of commodities by industries washington d c government printing office 1979 u s treasury department internal revenue service statistics of income source book 1972 processed ward t s the distribution of consumer goods structure and performance new york cambridge university press 1973 weiss leonard w the geographic size of markets in manufacturing this review 54 aug 1972 245 257 case studies in american industry new york john wiley and sons 1980

how much does trust really matter some reflections on the significance and implications of madhok s trust based approach madhok s 1995 article defined and developed a trust based perspective on the stability of international joint ventures ijvs proposing a shift in focus from ownership to relationship and from governance form to process the article emphasised the role of trust in holding ijvs together and the importance of considering the dynamics of inter organisational collaboration by distinguishing between structural and social components of trust it contributed to a more nuanced understanding of what makes inter firm partnership durable and able to realise its value potential this paper reviews madhok s original ideas and highlights the influence they have had on the field of international business it concludes with avenues for further research inspired by the article

driving forces for consolidation or fragmentation of the us water utility industry a cost function approach with endogenous output abstract this paper empirically analyzes the structure of the us water industry using a multiproduct flexible cost function model with the amount of water delivered to final consumers recognized as endogenous the cross sectional econometric analysis focuses on measures of cost economies in water production and their variation with network characteristics the estimates reveal considerable scale economies in terms of volume particularly for small utilities that tend to have less output density these economies are however counteracted by simultaneous increases in customers and service area size especially for large utilities overall our results indicate that consolidation of small utilities might generate cost efficiencies depending on the concurrent expansion of the network but consolidation of already large utilities without corresponding increases in output density is not likely to be cost effective

influences on foreign equity ownership level in joint ventures in china this study examines the determinants of foreign equity ownership in joint ventures in china drawing upon duning s ownership locational and internalization paradigm and the literature on bargaining power eleven variables that impact foreign ownership preferences and concessions are examined these variables are advertising intensity foreign capital input country risk of china ejv investment amount ejv contractual duration cultural distance competitive intensity local partner state ownership local partner alignment foreign partner alignment and ejv location the empirical findings are largely consistent with the hypotheses the empirical findings are largely consistent with the hypotheses further interesting differences were found among u s european and japanese firms with respect to the impact of these determinants

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

revisiting multinational firms tolerance for joint ventures a trust based approach in spite of the increasing popularity of international joint ventures managers express a high level of dissatisfaction with them this paper argues that overemphasis on the outcome has resulted in a neglect of the social processes underlying the outcome the paper elaborates upon the rationale for a cooperative approach towards interorganizational collaborative relationships based on trust and discusses it in the context of joint ventures this is then applied towards understanding multinational ownership preferences and tolerance for joint ventures it is argued that trust centered logic is largely consistent with approaches that emphasize the issue of ownership and deepens and enriches the insights provided by the latter a shift in focus from ownership to relational dynamics is encouraged

what differences in the cultural backgrounds of partners are detrimental for international joint ventures an international joint venture implies that a firm has to cooperate with a partner with a different cultural background in this study hypotheses about which differences in national culture are most disruptive for international joint ventures were developed and tested using hofstede s five dimensions the study focused on how these dimensions affect the survival of international joint ventures as well as their incidence relative to wholly owned subsidiaries the hypotheses were tested on longitudinal data about 828 foreign entries of twenty five dutch multinational in seventy two countries between 1966 and 1994 the database which spans almost three decades was also used to provide new evidence on a key assumption of hofstede s work that cultural values are stable over time

knowledge acquisition from foreign parents in international joint ventures an empirical examination in the hungarian context in this paper we examine organizational characteristics structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures ijvs we in turn relate assessments of knowledge acquisition to ijv performance the data come from a survey of ijvs in the hungarian context where learning and knowledge acquisition from the foreign parent is thought to be particularly critical adaptation mechanisms such as capacity to learn articulated goals and structural mechanisms such as the provision of training technology and managerial assistance by foreign parents all were positively associated with the degree to which ijvs reported acquiring knowledge from their foreign parents we also found limited support for the belief that cultural conflicts can impede knowledge acquisition but only for two party joint ventures with 50 50 equity arrangements we also looked at the relationship between knowledge acquisition and different dimensions for evaluating ijv performance the relationship between knowledge acquisition and performance was significant for all indicators of performance through knowledge acquisition from the foreign parent and the organizational characteristics hypothesized to enhance ijv knowledge acquisition affected assessments of some dimensions of performance more than others our findings contribute to advancing knowledge about the relationship between organizational characteristics and organizational knowledge acquisition in ijvs as well as the relationships between knowledge acquisition and different dimensions of ijv performance

measuring the dynamic efficiency costs of regulators preferences municipal water utilities in the arid west evidence suggests that municipal water utility administrators in the western us price water significantly below its marginal cost and in so doing inefficiently exploit aquifer stocks and induce social surplus losses this paper empirically identifies the objective function of those managers measures the deadweight losses resulting from their price discounting decisions and recovers the efficient water pricing policy function from counterfactual experiments in doing so the estimation uses a continuous butconstrained control version of a nested fixed point algorithm in order to measure the important intertemporal consequences of groundwater pricing decisions

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

environmental risks and joint venture sharing arrangements multinational enterprises mnes have responded to the open door policies of socialist countries in recent years by investing in their economies through joint ventures mnes must formulate their investment strategies to control and manage the environmental risks peculiar to a traditional centrally planned economy cpe in which contextual and transactional environments are blurred joint venture sharing arrangements may be structured to control exposures to uncertainties and to align the interests of transactional parties mostly state owned enterprises to those of the venture this study tests the hypothesis that a foreign investor s share in a joint venture in a cpe is inversely correlated with 1 the amount of uncertainties and risks and 2 the external dependency of the venture on the contextual and transactional relationships of the host country the hypothesis is supported by empirical evidence from data on american joint ventures in china

the regional dimension of mnes foreign subsidiary localization this paper examines the regional effect of mnes foreign subsidiary localization we hypothesize that the number of subsequent foreign subsidiaries in a country is in part determined by a firm s prior foreign subsidiary activity at the regional level we test our hypotheses using data on 1076 japanese mnes that created 3466 foreign subsidiaries 1837 wholly owned fdis and 1629 joint ventures over the period 1996 2001 we use a multilevel negative binomial approach with three levels of analysis localization decisions in a country 49 countries in a region six regions and at the headquarters level in this way we test the regional effects controlling for country and corporate dimensions we also run separate models to differentiate wholly owned and joint venture localization decisions our results strongly support the semi globalization perspective in that the regional level effects are significant and different from the country level effects for all foreign subsidiaries for wholly owned subsidiaries and for jointly owned subsidiaries japanese mnes adopt a regional perspective that complements their decisions at the country and firm levels they seek regional agglomeration benefits and make arbitrage decisions between countries in the same region

the formation of japanese and u s equity joint ventures in china this study examines the characteristics of japanese and u s equity joint ventures ejvs in china over a 15 year period these ejvs were announced between 1979 and the end of 1993 substantial differences are found with respect to six key characteristics they are selection of the chinese partner selection of the second foreign partner when more than one foreign partner is involved foreign equity ownership foreign capital contribution ejv business scope and the ejv location tentative explanations for these differences are offered from the perspectives of risk orientation cultural similarities and the impact of political events in china 1997 by john wiley sons ltd

privatization and efficiency differentiating ownership effects from political organizational and dynamic effects this paper argues that the private public ownership factor should be differentiated from other factors that also influence the effect of privatization on efficiency this is empirically confirmed in a longitudinal study of 24 spanish firms for which several political and organizational factors are found to influence the estimated effects of privatization on efficiency the analysis of the timing of the effects reveals a strong significance for post privatization years 5 6 negative and 7 8 positive this suggests that the negative effect of these factors is transitional being eventually offset by the positive effects of the change to private ownership 2000 elsevier science b v all rights reserved jel classification l33

an economic model of international joint venture strategy the strategic choice between joint ventures licensing agreements and mergers is analysed using eight key factors suggested by internalisation theory the model explains the increasing role of international joint ventures in the 1980s in terms of the accelerating pace of technological innovation and the globalisation of markets it offers a range of predictions about the formation of joint ventures within industries across industries across locations and over time it exploits a powerful modelling technique that has many other applications in international business strategy

an examination of the effect of ownership on the relative efficiency of public and private water utilities the behavior of privately and publicly owned water utilities is examined by estimating a generalized variable cost function containing the regular characteristics of the neoclassical cost function without requiring that cost minimization subject to market prices be imposed as a maintained hypothesis assuming that unobserved shadow prices reflect the regulatory environment of the water industry tests for cost minimization are obtained by deriving shadow prices as functions of market prices the empirical results provide evidence that public water utilities are more efficient than private utilities on average but are more widely dispersed between best and worst practice

contributing to an international business curriculum an approach from the flank i have an uneasy feeling that in responding to the invitation of jibs editors to recount how i stumbled into the field of international business i am providing very sparse fare for many of jibs readers particularly for those who want to gain hints of what it takes to make a success in the teaching of international business but i could not resist the editors challenge to look back at my years as a teacher of international business from 1959 to 1978 in order to learn perhaps for the first time what the experience may have taught me

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

economists time to team up with the ecologists abstract bioeconomic modeling is an increasingly relevant meeting arena for economists and ecologists a majority of the growing literature however is written by economists alone and not with ecologists in true interdisciplinary teamwork physical distance between research institutions is no longer a reasonable justification and i argue that in practice neither do the more fundamental philosophical oppositions present any real hindrance to teamwork i summarize these oppositions in order of increasing magnitude as 1 the axiom held by many ecologists of irreducible complexity of ecosystem functioning which is avoided simply because the ecological whole as opposed to its parts is not an element of most realistic modeling scenarios 2 the axiom also held by many ecologists of the precautionary principle which mainly surfaces at the applied end of natural resource management and thereby should not prevent economists and ecologists from jointly building the models necessary for the final decision making and 3 the economists axiom of the tradability principle which is harder to overcome as it demands value based practical compromises from both parties even this may be solved however provided the economists accept non marketable components in the model e g by using restriction terms based on ecology and the ecologists accept a final model output measured in terms of monetary value the easiest candidates for interdisciplinary teamwork in bioeconomics are therefore researchers who acknowledge ethical relativism as bioeconomics presently functions mainly as an arena for economists i say the responsibility for initiating interdisciplinary teamwork rests most heavily on their shoulders

the relative efficiency of public and private firms in a regulated environment the case of u s electric utilities abstract the relative efficiency of privately owned and publicly owned electric utilities is investigated using theoretical and econometric models that allow for the effects of both ownership type and regulation the estimation results indicate that the two types of firms are equally cost inefficient in the united states the average effect of inefficiency is to increase the cost of production by 2 4 percent holding output constant inefficiency increases the average quantities demanded of capital and labor and decreases the average quantity demanded of fuel