control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

national and organizational culture differences and international joint venture performance this study examines the effect of dimensions of national and organizational culture differences on international joint venture ijv performance based on data from a survey of executives from joint ventures between indian partners and partners from other countries we found that the presumed negative effect from culture distance on ijv performance originates more from differences in organizational culture than from differences in national culture

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

patterns of control in u s uk and european multinational corporations this paper examines the type and level of control exercised by the parent headquarters of 50 u s uk and european multinational corporations over their foreign subsidiaries patterns of control in the 3 national groups differ in significant ways and these differences seem to have important implications for other characteristics of a company s organization design and managerial style

control and coordination in multinational corporations the integration of french and british subsidiaries into u s based multinationals is examined a theory linking the use of control and coordination mechanisms to the need for predictability flexibility and the cost of achieving them is investigated by relating organizational structure technology foreign commitment financial performance and nationality to the use of coordination and control

rescaling contraction with a lower cost technology when revenue declines abstract a mature oil field rescaled contraction describes a switch to a technological alternative more appropriate for the depleted state of an underlying resource off shore oil rigs are an illustration since the original technological scale designed for very large output flows becomes inappropriate as the operational efficiency declines later in life and facing a dwindling output flow so a more appropriate extraction technology becomes economic a real option representation is formulated on a stochastic oil price and deteriorating output volume we consider investment divestment decisions both separately and jointly which have different implications for government policies and also option values the resulting model yields analytical or semi analytical results indicating that immediate switching to the lower cost technology could sometimes be hastened as the price volatility increases depending on the current revenue if divestment and switching are considered jointly however greater volatility could also promote hysteresis

cost value and foreign market entry mode the transaction and the firm this paper compares and contrasts the mode of foreign market entry decision from the transaction cost internalization and organizational capability perspectives each of these perspectives operates at a different level of analysis respectively the transaction and the firm and consequently differs in the primary arena of attention namely transaction characteristics and the capabilities of firms in making the comparison a key distinction is made between the cost and the value aspects in the management of know how based on which issues pertaining to the transfer of knowledge within and across firm boundaries and the exploitation and enhancement of competitive advantage are closely examined the main purpose of this paper is to demonstrate the implications of a shift in frame from cost to value in the analysis of decisions related to firm boundaries entry into foreign markets is used primarily as a vehicle for the accomplishment of this purpose the paper shows how the value based framework of the organizational capability perspective radically and fundamentally shifts the approach towards the governance of firm boundaries and argues that even though tc internalization theory raises some valid concerns the organizational capability framework may be more in tune with today s business context some of the assumptions of the tc internalization perspective both direct opportunism exploitation of existing advantage and indirect preservation of the value of know how across locational contexts asymmetry between bounded rationality for transaction and production purposes are critically examined and questioned implications of a shift from a cost to a value based framework are discussed and the need for a shift in research focus is emphasized

energy rent and public policy an analysis of the canadian coal industry abstract this paper analyses issues in resource rent through a case study of the canadian coal industry a model of the coal industry is constructed to estimate the magnitude of rent and distribution of coal rent between government and industry over the 30 year period from 1970 to 2000 disaggregation of results by coal sector shows that rent varied widely with one sector generating substantial rent and other sectors incurring large losses the pattern of development of the coal sector followed what can be termed a rent dissipation cycle in which the generation of rent in the profitable sector created excessively optimistic expectations that encouraged new entrants to dissipate rent by developing uneconomic capacity the analysis also shows that the system used to collect rent was ineffective the public owner collected only one third of the rent on the profitable mines and collected royalty revenue from the unprofitable mines even though no rent was generated the case study illustrates that improvements in private sector planning based on a better appreciation of resource market fundamentals elimination of government subsidies that encourage uneconomic expansion and more effective rent collection are all needed to avoid rent dissipation and increase the benefits of energy development in producing jurisdictions the study also illustrates that estimates of rent in the resource sector should disaggregate results by sector and make adjustments for market imperfections to accurately assess the magnitude of potential rent

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

technology choice under several uncertainty sources abstract we analyze a model of irreversible investment with two sources of uncertainty a risk neutral decision maker has the choice between two mutually exclusive projects under input price and output price uncertainty we propose a complete study of the shape of the rational investment region and we prove that it is never optimal to invest when the alternative investments generate the same payoff independently of its size a key feature of this bidimensional degree of uncertainty is thus that the payoff generated by each project is not a sufficient statistic to make a rational investment in this context our analysis provides a new motive for waiting to invest the benefits associated with the dominance of one project over the other as an illustration we apply our methodology to power generation under uncertainty

petroleum policy issues in developing countries abstract petroleum is of vital importance to most developing countries either in their capacity as producers or consumers on both counts they are heavily exposed to the impact of the large oil price fluctuations which have characterized the last 20 years and are likely to be prevalent in the foreseeable future to optimize their benefits in government take and investment producing countries should place emphasis on profit related fiscal instruments consuming countries should ensure that oil prices reflect their opportunity costs the design of consumption taxes on petroleum products should take into account a their revenue raising potential b their distributional effects c the need to correct for externalities in the use of petroleum and d the energy security price vulnerability aspects

modeling foreign equity control in sino foreign joint ventures with neural networks abstract equity control is one of the key areas of research in international business this study employs artificial neural networks anns to model foreign equity control comparisons are made with traditional statistical modeling approaches it was found that anns produce a more parsimonious set of independent variables that yield higher classification rates than logistic regression thus it can be concluded that anns with their complex nonlinear structure are able to model the relationship between transaction cost factors and majority minority ownership and percent equity ownership more accurately than the linear statistical approaches

optimal technology adoption when the arrival rate of new technologies changes our paper contributes to the literature of technology adoption in most of these models it is assumed that the intensity rate of new arrivals is constant we extend this approach by assuming that after the last technology jump the intensity of a new arrival can change right after the arrival of a new technology the intensity equals a specific value that switches if no new technology arrival has taken place within a certain period after the last technology arrival we look at different scenarios dependent on whether the firm is threatened by a drop in the arrival rate after a certain time period or expects the rate to rise we analyze the effect of a mean preserving spread of the time between two consecutive arrivals on the optimal investment timing and show that larger variance can accelerate investment in case the arrival rate rises while it can decelerate investment in case the arrival rate drops we find that firms often adopt a new technology a time lag after its introduction which is a phenomenon frequently observed in practice regarding a firm s technology releasing strategy we explain why additional uncertainty can stimulate customers buying behavior the optimal adoption timing changes significantly depending on whether the arrival rate is assumed to change or be constant over time adding uncertainty about the length of the time period after which the arrival intensity changes we find that increasing uncertainty accelerates investment a result that is opposite to the standard real options theory

phasing the operation mode of foreign subsidiaries reaping the benefits of multinationality through internal capital markets the lifetime of foreign equity partnerships is often limited research suggests that mncs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished this study shows that mncs may abandon their local equity partners to reap the benefits of multinationality as mncs gain a competitive advantage from leveraging resources across borders they will initially benefit from sharing ownership with a local firm to embed their foreign subsidiaries in the local environment and access local resources more effectively later they will benefit from taking over the local partner s equity share to better embed their subsidiaries in the parent organization and transfer locally accessed resources to the mnc s other locations moderated mediation regressions provide evidence of such practice in the context of cross border transfers of capital resources this strategy seems to work as a corollary of our model panel regressions suggest that sharing ownership with local firms in a host country with a capital resource advantage is associated with appropriating more capital resources from the local debt market while abandoning these partner firms later is associated with transferring more capital resources from this host country via internal capital markets to other parts of the mnc

when and how much to invest investment and capacity choice under product life cycle uncertainty abstract while empirical research indicates that innovations typically follow a product life cycle that is subject to uncertainty in many industries endless cash flow growth is still at the heart of most papers guiding investment decisions under uncertainty this paper studies the effect of an uncertain technological life cycle on the decision to invest in new product introduction taking into account the combined effects of flexible investment timing and optimal capacity choice based on a numerical example referring to investment decisions in facilities for the production of electric vehicle batteries we find that the optimal investment threshold follows an s curve over the product life cycle and derive the optimal capacity choice for the given investment decision

country of origin effects for uni national and bi national products this study examines the effects of country of origin and brand name cues on consumer evaluations of uni national and bi national products and estimates the perceived values of such cues from personal interviews with a regional quota sample of household residents the study found the salience of country of origin in product evaluations under within subject experimental design finally managerial implications are discussed in regards to international branding and sourcing strategies

the interaction of debt financing cash grants and the optimal investment policy under uncertainty abstract significant progress has been made toward understanding a levered firm s optimal investment policy under uncertainty to date however not much work has concentrated on the time scale trade off and collectively held real options we employ a game theoretic real option model between a firm and a government to analyze the effect of uncertainty and investment stimulus in the form of cash grants on optimal investment timing financing and investment scaling we find that the jointly held real option between the firm and the government leads to underinvestment regardless of whether the firm has the possibility to issue debt subsidies however reduce the level of underinvestment notably the results indicate that even though levered firms receive less support they invest more than unlevered firms this challenges recent findings that a firm s optimal investment level is not affected by the way it finances a project similarly we find that for realistic parameter constellations the levered firm s optimal investment threshold can be higher than that of its unlevered counterpart this indicates that the availability of tax shield benefits does not necessarily serve as an incentive to invest earlier finally we show that the effect of cash flow uncertainty on the equilibrium level of grants is ambiguous and triggers the switch from a subsidy to non subsidy regime

mutually exclusive investment with technical uncertainty a firm which faces technical uncertainty as in pindyck 1993 can choose between two mutually exclusive investment projects projects 1 and 2 the added option to exercise project 2 makes the firm less likely to exercise project 1 an increase in the degree of technical uncertainty the investment rate or the investment value upon completion for project 2 encourages the firm to exercise project 2 by increasing the trigger level of the expected cost of project 2 this however ambiguously affects the firm s incentive to exercise project 1 as the firm would rather implement project 1 2 in a region where the expected cost of project 2 is relatively high low

rent seeking mechanism for safety supervision in the chinese coal industry based on a tripartite game model abstract there are extensive governmental rent seeking activities in safety supervision of the chinese coal industry the rents come from industry safety barriers low resource taxes and privilege policies for coalmining enterprises the rent seeking mechanism was analyzed using a model comprising dynamic games with incomplete information the equilibrium results indicate that the probability of national supervision is influenced by penalties and bribery there is negative correlation with penalties and positive correlation with bribery the rent seeking probability of a governmental safety supervision department is influenced by several factors and positively correlates with the cost of national supervision the probability of bribery of coalmining enterprises is influenced by several factors and positively correlates with wages of governmental departments and a reasonable rent seeking range reversed rent seeking reduces the probability of bribery but it s not worth recommending some recommendations are proposed

determinants of governance structure in alliances the role of strategic task and partner uncertainties research in transaction cost economics and structural sociology has emphasized the role of opportunism and trust in the choice between equity and non equity governance forms in alliances this paper suggests that the uncertainty surrounding partner cooperation is not straightforwardly predictive of governance structure in alliances instead task uncertainty and strategic uncertainty associated with the activities performed within alliances induce coordination and adaptation requirements that are important determinants of alliance governance independently of partner uncertainty support for this view is provided based on a 12 year panel of alliances formed in the us telecommunications entertainment and computer industries

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

capital budgeting for interrelated projects a real options approach this paper explores the effect of project interrelationships on investment decisions and project values in a real options framework we examine in detail the mutually exclusive case where a firm may invest in the development stage of two projects and then may select only a single project to implement the firm can develop the projects in parallel or in sequence the choice of development policy depends on the relative values of the embedded options for each strategy sequential development is shown to be superior to parallel development when projects have highly correlated values and when they require a large commitment of capital for development are short term in nature and have relatively low volatility we also show that the optimal ordering of sequential projects does not always begin with the most profitable project

capacity switching options under rivalry and uncertainty abstract deregulated infrastructure industries exhibit stiff competition for market share firms may be able to limit the effects of competition by launching new projects in stages using a two stage real options model we explore the value of such flexibility we first demonstrate that the value of investing in a sequential manner for a monopolist is positive but decreases with uncertainty next we find that a typical duopoly firm s value relative to a monopolist s decreases with uncertainty as long as the loss in market share is high intriguingly this result is reversed for a low loss in market share we finally show that this loss in value is reduced if a firm invests in a sequential manner and specify the conditions under which sequential capacity expansion is more valuable for a duopolist firm than for a monopolist

investment with uncertain tax policy does random tax policy discourage investment we consider the impact of tax policy uncertainty on firm level and aggregate investment comparing investment behaviour when uncertainty is due to a shock following geometric brownian motion gbm versus when random discrete jumps in tax policy occur expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional gbm model but can be enhanced in the jump process model

aggregate uncertainty capacity utilization and manufacturing investment theory suggests that the level of uncertainty affects the investment decision for firms although the sigh of the effect is ambiguous a garch m estimator is used to model the conditional variance of gdp as a proxy for uncertainty this measure is then employed in a simple model of the investment decision the results are that the level of aggregate uncertainty has a significant negative effect on manufacturing investment in particular periods there were very large effects on average uncertainty reduces investment by about 5 but in 1974 the effect peacked at 48

dual career expatriates expectations adjustment and satisfaction with international relocation dual career expatriate couples present a challenging set of problems for international human resource managers the results of a survey of husbands and wives in expatriate dual career couples are analyzed relative to 1 differences between the expatriates and their trailing spouses 2 differences between male and female led dual career couples 3 differences between dual career couples opinions prior to expatriation and upon repatriation the results of the study indicate dual career couples have relatively consistent concerns and expectations prior to expatriation and upon repatriation to their home country the significant differences observed were between male led dual career couples prior to expatriation when compared to male led dual career couples upon repatriation in addition the dual career expatriate respondents did not feel the mnc that transferred them overseas provided adequate training or social support during the international assignment

optimal investment under operational flexibility risk aversion and uncertainty traditional real options analysis addresses the problem of investment under uncertainty assuming a risk neutral decision maker and complete markets in reality however decision makers are often risk averse and markets are incomplete we confirm that risk aversion lowers the probability of investment and demonstrate how this effect can be mitigated by incorporating operational flexibility in the form of embedded suspension and resumption options although such options facilitate investment we find that the likelihood of investing is still lower compared to the risk neutral case risk aversion also increases the likelihood that the project will be abandoned although this effect is less pronounced finally we illustrate the impact of risk aversion on the optimal suspension and resumption thresholds and the interaction among risk aversion volatility and optimal decision thresholds under complete operational flexibility

explaining ijv survival in a transitional economy through social exchange and knowledge based perspectives in this study we combine social exchange and knowledge based perspectives to develop a general path model of ijv survival we further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of marxist ideology results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of ijv failure an imbalance in the ownership control structure however had no influence on conflict or survival in general support from the foreign parent is positively related to ijv learning and ijv survival however higher levels of technical support provided by the foreign parent to the ijv reduced the level of parental conflict whereas management support had no effect on conflict our results suggest some dilemmas for firms pursuing ijvs in transitional economies although the foreign parent often contributes critical resources to the ijv providing it with bargaining power and a high level of influence an imbalance in management control between the partners may ultimately be detrimental to ijv survival copyright 2000 john wiley sons ltd

transactional characteristics institutional environment and joint venture contracts this study examines how transactional characteristics and the institutional environment influence contractual governance for international joint ventures ijvs unlike previous studies that view joint venture contractual governance as a unidimensional construct clause specificity thus causing a debate upon whether ijv contracts should be more specific contractual governance herein is defined as a three dimensional construct that includes the extent to which contractual terms are clearly specified term specificity possible contingencies are accounted for contingency adaptability and joint venture parties are legally bound to the contract contractual obligatoriness our analysis of ijvs in china suggests that term specificity and contractual obligatoriness increase when the proprietariness of resources to be invested in the ijv or the incompleteness of the host country s legal system increase contractual obligatoriness appears to be an increasing function of economic exposure and environmental volatility whereas contingency adaptability in a contract rises when interparty dependency investment uncertainty and knowledge proprietariness intensify or when environmental hazards escalate these results suggest that an ijv contract if structured multidimensionally as above can curtail opportunism and guide venture evolution at the same time these contractual dimensions should not be prefixed but properly aligned with transactional and institutional characteristics this alignment has strong implications in reducing transaction costs and spurring ijv evolution in the complex and volatile institutional environment

host country policies and mne management control in ijvs evidence from china in international joint ventures ijvs partner firms exert three types of management control output process and social since management control critically influences ijv success it is essential to understand what factors drive the development of the control system prior studies have focused mainly on ijvs internal conditions and have largely neglected external institutional influences on ijv control in this study we explore how host country policies affect mne partners control over their ijvs using a sample of ijvs in china we find that mne partners tend to exercise less output and process control when minority equity restriction is present greater process control when they receive government incentives and less social control when they are required to partner with state owned enterprises in contrast the results of a post hoc analysis show that local partners control activities are not significantly influenced by these policies our findings provide new insights into ijv management by demonstrating the impacts of regulatory institutions on partners control activities

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

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

social knowledge as a control system a proposition and evidence from the japanese fdi behavior building upon the concept of clans this paper introduces the value of social knowledge as a control mechanism available for an mnc to manage its foreign subsidiaries social knowledge is defined as one s ability to understand and predict others general patterns of behavior the hypotheses are empirically tested with japanese fdi data into four host countries the united states singapore taiwan and korea the results offer broad support for the proposition that for mncs with social knowledge the need to resort to ownership for control purposes is reduced

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

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

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

an empirical analysis of the integration responsiveness framework in global industries in this study businesses competing in global industries were categorized into three groups according to the integration responsiveness framework for conceptualizing industry pressures confronting business competing internationally using this framework contextual conditions associated with each group were examined competitive attributes distinguishing each group were then identified to clarify alternate business level strategies for competing within a global industry context beyond providing additional insight into the nature of competition in global industries several broad extensions to the integration responsiveness framework are suggested

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

real options with ex post division of the surplus abstract this paper examines a real option model where two vertically related firms are involved in a specific investment project that is subject to an uncertain payoff while ex post bargaining between a seller and a buyer leads to underinvestment by the seller in a standard model where timing of the seller s investment is exogenous we show that this need not be the case when the seller s timing of investment is endogenous however bargaining with a buyer leads to excessive waiting more severe holdup and higher uncertainty will lead to vertical integration of activities to avoid timing inefficiencies

profitability and taxation in the ukcs oil and gas industry analysing the distribution of rewards between company and country abstract against the background of record levels of uk hydrocarbon production and a government review of the ukcs tax regime this paper provides evidence that the government s share of ukcs profits is very low by historical and international standards and demonstrates that the current tax regime is extremely weak the justification for the latter is then challenged by assessing the relative profitability of ukcs companies using data from uk national accounts and from form 10 k and form 20 f company reports and analysing both accounting profits and forecast discounted cash flow this shows that companies operating on the ukcs enjoy substantially higher profitability relative to both other uk companies and other oil and gas provinces elsewhere in the world further evidence of the weakness of the uk regime is provided by a comparison with the norwegian oil and gas tax regime the paper therefore makes a strong case for the reform of the ukcs tax regime

when competition eclipses cooperation an event history analysis of joint venture failure why do so many joint ventures fail despite the fact that their success is the exception rather than the rule the literature on why joint venture performance has been so poor remains fragmentary we address this issue adopting a transaction cost economics perspective and modeling joint ventures as governance structures that blend the advantages and drawbacks of both markets and hierarchies using a data base on electronics industry ventures and event history analysis we identify several predictors of joint venture failure and test for their influences a key finding is that the presence of competition between joint venture partners outside of the agreement significantly impairs chances for the operation s chance of survival we also find clear evidence that the failure rate of joint ventures is nonmonotonic rising to a peak in the middle term and then declining finally we compare and contrast predictors of terminations due to failure to those due to acquisition of the joint venture by one of its partners our overall conclusions highlight implications for strategic choice theory building and the management of joint ventures

control cooperation interfaces in global strategic alliances a situational typology and strategic responses this article applies the dialectical logic of loose coupling to interpartner exchanges in order to analyze the dynamics of global strategic alliances we develop a typology of control and cooperation that defines alliance states or situations according to their level of cooperation under private and collective control in the private control cooperation interplay contending honeymoon and coopetition situations arise depending on the levels of private control and cooperation in the collective control cooperation interplay the loosely connected the equity hostage the tightly integrated and the trusting states emerge according to the levels of collective control and cooperation we illustrate how an individual partner strategically responds to the control cooperation interplay under each situation or state and develop hypotheses explicating how these strategic responses are influenced by relational characteristics such as goal congruity resource complementarity and bargaining asymmetry between foreign and local partners

the effects of external financing costs on investment timing and sizing decisions abstract we develop a dynamic model in which a firm exercises an option to expand production on either a small or large scale with cash reserves and costly external funds an intermediate level of cash reserves which is insufficient for the large scale investment but sufficient for the small scale investment provides an incentive for the firm to invest early in the small scale project these results fill the gap between two types of results i empirical findings of a u shaped relation between the investment volume and internal funds and ii empirical predictions of a u shaped relation between the investment timing and internal funds in addition our results have real world implications for investment in alternative projects

the design of coordination and control mechanisms for managing joint venture parent relationships joint ventures jvs defined as independent organizations formed by the pooling of resources and sharing of equity by two or more firms are being formed at an increasingly rapid pace while much empirical research has examined the conditions which favor the formation of jvs less attention has been paid to the equally important issues of control and implementation which are the focus of interest in this study we identify two factors which are expected to influence the design of control mechanisms i e 1 the strategic interdependence between the jv and each parent and 2 the environmental uncertainty faced by the jv our empirical examination confirms the importance of the degree of strategic interdependence and the moderating role of environmental uncertainty in explaining the design of control mechanisms 1998 john wiley sons ltd

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

renewable energy investments under different support schemes a real options approach abstract this paper adopts a real options approach to analyze investment timing and capacity choice for renewable energy projects under different support schemes the main purpose is to examine investment behavior under the most extensively employed support schemes namely feed in tariffs and renewable energy certificate trading we consider both multiple sources of uncertainty under each support scheme and uncertainty with respect to any change of support scheme and we obtain both analytical when possible and numerical solutions in a nordic case study based on wind power we find that the feed in tariff encourages earlier investment nevertheless as investment has been undertaken renewable energy certificate trading creates incentives for larger projects in our baseline scenario and taking the fixed feed in tariff as a base the revenue required to trigger investments is 61 higher with renewable certificates at the same time investment capacity is 61 higher

multinational corporations control systems and delegation issues the paper has 2 major objectives first to identify control and delegation issues confronting multinational corporation managers second to develop a conceptual model to assist multinational corporation managers in selecting appropriate control systems and determining the extent of delegation to be provided to subsidiary managers finally the paper suggests directions for future research

learning from competing partners outcomes and durations of scale and link alliances in europe north america and asia this paper investigates the outcomes and durations of strategic alliances among competing firms using alliance outcomes as indicators of learning by partner firms we show that alliance outcomes vary systematically across link and scale alliances link alliances are interfirm partnerships to which partners contribute different capabilities while scale alliances are partnerships to which partners contribute similar capabilities we find that partners are more likely to reorganize or take over link alliances than scale alliances by contrast scale alliances are more likely to continue without material changes the two types of alliances are equally likely to shut down at similar ages these results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances copyright 2000 john wiley sons ltd

cultural differences in conducting intra and inter cultural negotiations a sino canadian comparison a study on conflict resolution strategies of canadian and chinese peoples republic of china executives was conducted responses to two types of joint project conflicts task related and person related with potential partners from their own culture or from the other culture were examined neither group of executives altered its strategy when negotiating across cultures chinese executives were more likely to avoid conflicts but recommended more negative strategies discontinue negotiation withdraw negotiation when conflict emerged person related conflicts were found to generate more negative responses than task related conflicts especially for chinese executives both canadian and chinese executives preferred to negotiate with canadians than with chinese

optimal regime switching under risk aversion and uncertainty abstract technology adoption is key for corporate strategy often determining the success or failure of a company as a whole however risk aversion often raises the reluctance to make a timely technology switch particularly when this entails the abandonment of an existing market regime and entry in a new one consequently which strategy is most suitable and the optimal timing of regime switch depends not only on market factors such as the definition of the market regimes as well as economic and technological uncertainty but also on attitudes towards risk therefore we develop a utility based regime switching framework for evaluating different technology adoption strategies under price and technological uncertainty we assume that a decisionmaker may invest in each technology that becomes available compulsive or delay investment until a new technology arrives and then invest in either the older laggard or the newer technology leapfrog our results indicate that if market regimes are asymmetric then greater risk aversion and price uncertainty in a new regime may accelerate regime switching in addition the feasibility of a laggard strategy decreases increases as price uncertainty in an existing new regime increases finally although risk aversion typically favours a compulsive and a laggard strategy a leapfrog strategy may be feasible under risk aversion provided that the output price and the rate of innovation are sufficiently high

international joint venture partner selection the role of the host country legal environment this study attempts to enhance our understanding of how a host country s legal environment influences international joint venture ijv partner selection criteria empirical results based on survey data collected on 169 ijvs revealed that host country rule of law perceptions negatively influence appropriation and coordination cost concerns which positively influence partner related criteria furthermore these concerns mediate the relationship between perceptions of host country rule of law and partner related criteria

patterns of strategic control within multinational corporations the management of multinational operations is often required to balance conflicting priorities between responsiveness at the national subsidiary level and central coordination for global competitiveness such balancing requires that relevant data be brought to bear on decisions that consensus be created among key managers and that relative power among them be carefully balanced in large complex mncs the balancing process can be institutionalized through the structuring of relationships between headquarters and subsidiaries

uncertainty and stepwise investment we analyze the optimal investment strategy of a firm that can complete a project either in one stage at a single freely chosen time point or in incremental steps at distinct time points the presence of economies of scale gives rise to the following trade off lumpy investment has a lower total cost but stepwise investment gives more flexibility by letting the firm choose the timing individually for each stage our main question is how uncertainty in market development affects this trade off the answer is unambiguous and in contrast with a conventional real options intuition higher uncertainty makes the single stage investment more attractive relative to the more flexible stepwise investment strategy

how to escape a declining market capacity investment or exit this paper considers a firm that faces a declining profit stream for its established product the firm has the option to invest in a new technology with which it can produce an innovative product while having the option to exit at any point in time in the presence of an exit option earlier work determined the optimal timing to invest where it was shown that higher uncertainty might accelerate investment timing in the present paper the firm also decides on capacity this extension leads to monotonicity i e higher uncertainty delays investment timing we also find that higher potential profitability of the innovative product market increases the incentive to invest earlier where however we get the counterintuitive result that the firm invests in smaller capacity finally if quantity has a smaller negative effect on price the firm wants to acquire a larger capacity at a lower investment threshold

does ownership affect the variability of the production process evidence from international courier services a firm often must ensure that products or services it produces match customer expectations we define variability as any deviation in a production process yielding products or services whose attributes differ from the firm s stated target specifications firms pursuing products marked by low variability are more subject to maladaptation costs if production processes are not adjusted to avoid nonconformities furthermore such adjustments often require idiosyncratic investments e g dedicated information technology systems thereby creating contractual hazards and potential underinvestment we hypothesize that ownership of sequential activities in the value chain helps mitigate problems associated with maladaptation as well as suboptimalities in transaction specific investment thereby resulting in lower variability using data on delivery times from the japanese international courier and small package services industry we assess the variability reducing role of ownership in two complementary ways the first approach is parametric allowing us to assess the impact of ownership on the variance associated with delivery time here we focus on shipments that frequently fail to arrive precisely within the time period initially expected by customers the second approach is more consistent with the notion of reliability or the likelihood that shipments will not arrive later than expected we nonparametrically estimate the distribution of deviations between actual and expected delivery time and verify how distinct organizational choices change the distribution ownership of multiple segments yields a particularly pronounced effect on both variance and reliability ownership bestows variability reducing benefits of ownership especially when ownership is observed in multiple stages of the value chain

structural stability and reconfiguration of international joint ventures previous research suggests that international joint ventures ijvs are inherently unstable and fragile this view has failed however to explain why many ijvs have an extended longevity and stability this paper draws on two contrasting perspectives from organization theory structural instability and structural inertia to trace both the destabilizing and stabilizing forces in ijvs and argues that a complete understanding of an ijv s dynamic evolution requires consideration of both forces

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

how do international joint ventures create shareholder value this study attempts to identify conditions under which announcements of international joint venture jv formation lead to increases in shareholder value of participating u s firms it does so by combining the singular theoretical foci of previous work on the topic and specifying previously unconsidered but conceptually important influences on firms expected jv performance the study s findings indicate support for the hypothesized effect of variables in partners task related competitive and structural context s but not those in these firms partner related and institutional context s specifically partner venture business relatedness the pursuit of r d oriented activity greater equity ownership and large firm size all are found to have a positive impact on firms jv based value creation although this study finds support for the performance impact of firm level competition the direction of this impact is contrary to that hypothesized no support is found for hypothesized effect of partner partner business relatedness previous jv experience partners relative firm size national cultural relatedness and jv host country political risk copyright 2000 john wiley sons ltd

contracting institutions and ownership structure in international joint ventures abstract this paper examines the role of contracting institutions on a multinational firm s optimal ownership strategy we develop a model in which both a multinational firm and its local joint venture partner can ex post engage in costly rent seeking actions to increase their ex ante agreed upon revenue share we show that the host country s level of contract enforcement and level of judicial favoritism affect the parties incentives to contribute to the international joint venture the model allows us to identify testable hypotheses relating these institutional features with the performance and optimal ownership structure of international joint ventures

models of the multinational enterprise flexibility is identified as the hallmark of recent modelling of the multinational enterprise the focus on flexibility is a response to the rationalization and restructuring of international business which has occurred since the end of the golden age of western economic growth flexibility has been south in factor markets intermediate product markets and markets for final products it has been sought by both governments and firms flexible firms are attracted to locations with flexible host governments this article contrasts the modern research agenda based on flexibility with the more traditional research agenda which predominates in the literature reviewed by caves 1996

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

choosing among alternative discrete investment projects under uncertainty abstract irreversible choice among mutually exclusive projects under output price uncertainty is considered increasing returns are shown to make it optimal to wait for the largest project greater uncertainty of the price process makes it optimal to wait for a larger project

global cities and multinational enterprise location strategy we combine the concept of location derived by economic geographers with theories of the multinational enterprise mne and the liability of foreignness developed by international business scholars to examine the factors that propel mnes toward or away from global cities we argue that three distinctive characteristics of global cities global interconnectedness cosmopolitanism and abundance of advanced producer services help mnes overcome the costs of doing business abroad and we identify the contingencies under which these characteristics combine with firm attributes to exert their strongest influence consistent with these arguments our analysis of a large sample of mne location decisions using a multilevel multinomial model suggests not only that mnes have a strong propensity to locate within global cities but also that these choices are associated with a nuanced interplay of firm and subsidiary level factors including investment motives proprietary capabilities and business strategy our study provides important insights for international business scholars by shedding new light on mne location choices and also contributes to our understanding of economic geography by examining the heterogeneous strategies and capabilities of mnes the primary agents of economic globalization that shape the nature of global cities

the world price of coal a significant increase in the seaborne trade for coal over the past 20 years has unified formerly separate coal markets into a world market in which prices move in tandem by virtue of its large domestic market the usa has become the residual supplier and price setter in the world coal market changes in multifactor productivity have been the primary cause of the long term fluctuations in coal prices that have been observed in the usa since the end of the second world war and in the world coal market

split management control and international joint venture performance a framework is presented to characterize four different ways in which management control is partitioned between a multinational enterprise mne and local partners within international joint ventures jvs split control management shared management mne partner dominant management and local partner dominant management the framework was tested using a sample of international jvs in korea we found that jvs following the split control management performed better than any other approach no performance differences were found among the remaining three types of management control this suggests that mnes and local partners should split control that is choose the activities to control so that those chosen activities can be matched with their respective firm specific advantages

strategic capacity investment under uncertainty this article considers investment decisions within an uncertain dynamic and duopolistic framework each investment decision involves to determine the timing and the capacity level the simultaneous analysis of timing and capacity decisions extends work on entry deterrence accommodation to consider a timing delay element we find that when applying an entry deterrence policy the first investor or incumbent overinvests in capacity for two reasons first it delays the investment of the second investor or entrant second the entrant will invest in less capacity we also find that greater uncertainty makes entry deterrence more likely

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

aggregate uncertainty investment and asymmetric adjustment in the uk manufacturing sector theory suggests that the level of uncertainty facing firms should affect both the rate of adjustment to and the steady state level of investment although there is ambiguity about the sign of the effect a non linear model of investment behaviour incorporating time varying adjustment speeds with threshold effects is estimated for the uk manufacturing sector the most general non linear specification is found to be most congruent with the data uncertainty has a large and significant effect on both levels and rates of adjustment

a dual parent perspective on control and performance in international joint ventures lessons from a developing economy this study compares the control performance relationship for foreign versus local parents in international joint ventures in china transaction cost analysis is found more applicable to foreign than to chinese parents both overall and specific controls are associated with performance for foreign parents while only specific control is for chinese parents under goal incongruity chinese parent control is associated with foreign parent dissatisfaction with venture performance but not vice versa having a majority stake improves performance from a foreign parent perspective but not from that of the chinese parent

exploratory assessment of the economic gains of a pre salt oil field in brazil abstract in recent years brazil has made public several oil discoveries located in deep waters below the salt layer discoveries are steadily enhancing national reserves and have brought the country into a new role in the global oil industry this paper aims at investigating the economic gains that could be expected from a brazilian oil field in the pre salt region analyses were conducted based on the libra field the largest oil discovery in brazil until now with approximately 10 billion barrels the results were calculated for different scenarios of oil prices companies arrangements and regulatory regimes the findings suggest that economic gains could be higher for the brazilian government if the oil production were conducted under a service contract scheme however considering the current production sharing regime in force for pre salt areas economic gains could be higher if a bidding process was conducted ensuring for the brazilian government a higher participation in the oil to be produced additionally the results demonstrate that under the current rules applied for the production sharing regime the government quota of oil has decreased over time putting at risk economic results