Abstract:The paper develops a theoretical framework for analyzing the exchange structure in the trading of imperfectly imitable and imperfectly mobile firm resources. It first explores the conditions for such resources to be gainfully traded between firms and then investigates the interconnections between barriers to imitation and impediments to trading. A major part of the paper is devoted to developing an integrative and yet parsimonious model for assessing the exchange structure between firms that are involved in the trading of strategic resources in the face of significant transaction cost problems.The model is applied in the last part of the paper to the analysis of the choice between acquisitions and collaborative ventures. Chi, Tailan. (1994) Thanks are due to two anonymous referees for their constructive comments and suggestions, and also to Paul Nystrom and Masoud Yasai for their help and encouragement in the paper's revision process. All remaining errors, however, are my own responsibility. Chi, Tailan. (1994) TRANSACTION COST PROBLEMS, AND CHOICE OF EXCHANGE STRUCTURE SUMMARYThe paper develops a theoretical framework for analyzing the exchange structure in the trading of imperfectly imitable and imperfectly mobile firm resources. It first explores the conditions for such resources to be gainfully traded between firms and then investigates the interconnections between barriers to imitation and impediments to trading. A major part of the paper is devoted to developing an integrative and yet parsimonious model for assessing the exchange structure between firms that are involved in the trading of strategic resources in the face of significant transaction cost problems. The model is applied in the last part of the paper to the analysis of the choice between acquisitions and collaborative ventures.

Abstract:This paper employs a simple stochastic model to investigate how transaction cost and strategic option considerations interact to influence a firm's evaluation of collaborative venturing as a market entry mode. After demonstrating how uncertainty about the market and about the potential partner can add to the value of a collaborative venture, the paper explicates a condition under which the option to acquire or sell out generates a positive economic value for both of the partners. The interaction of transaction cost and strategic option considerations is then examined, and a number of testable hypotheses are proposed based on the theoretical analyses of the paper. We are grateful to Paul Beamish, Editor of JIBS, and to three anonymous reviewers for their constructive comments and valuable suggestions. All remaining errors, however, are solely our own responsibility.Published in the Journal of International Business Studies, 27(2): 285-307, 1996. as a market entry mode. After demonstrating how uncertainty about the market and about the potential partner can add to the value of a collaborative venture, the paper explicates a condition under which the option to acquire or sell out generates a positive economic value for both of the partners. The interaction of transaction cost and strategic option considerations is then examined, and a number of testable hypotheses are proposed based on the theoretical analyses of the paper.Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes. Journal of International Business Studies, 27 (2), 285-307. Publisher's Official Version: http://www.jstor.org/stable/155286 Open Access Version:

Internalization theory has provided a resilient analytical framework that explicitly or implicitly underlines much of International Business scholarship. Internalization theory is not a monolithic body of knowledge; instead, it has devolved into several 'streams', each of which focuses on the interests of particular epistemic communities, while also acting as a more generic organizing framework for those more broadly interested in its application to real-world challenges. Following a review of the various streams, we trace the frontiers of current research of the broader internalization framework and identify emerging themes raised by the papers in the special issue. These include transaction cost considerations in the bundling and recombination of assets across diverse contexts, the growing relevance of quasi-internalization, the theoretical challenges of (bounded) rationality for internalization theory, and the increasing disconnect between ownership, control and responsibility. These developments point to new research frontiers for scholars looking to apply or advance internalization theory.

This paper develops a model for assessing options in joint ventures. The model is used specifically to examine the option to acquire or divest a joint venture, both in the case where the acquisition/divestiture price is specified ex ante in the initial contract and in the case where the price is to be negotiated ex post. The results derived from the model show how the value of the option and each partner's payoff from the venture vary with the structure of the option and how the presence of the option may affect the structuring of the joint venture. The main theoretical insights are stated in twelve potentially testable propositions, and possible ways to operationalize some of the propositions for empirical testing are also explored.

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