Existing strategic group studies have rarely examined ownership type as a variable to classify firms in an industry. Using Chinese firms of different ownership types, we suggest that ownership type can be a parsimonious and important variable that managers use to cognitively classify firms into different strategic groups. While ownership itself is an objective variable, we contend that different ownership types lead to different managerial outlook and mentality due to a number of macro and micro foundations giving rise to various managerial cognitions. Employing the Miles and Snow typology, we find that state‐owned enterprises (SOEs) and privately‐owned enterprises (POEs) tend to adopt defender and prospector strategies, respectively, while collectively‐owned enterprises (COEs) and foreign‐invested enterprises (FIEs) exhibit an analyser orientation that falls between defenders and prospectors on the strategy continuum. Three statistical tests suggest that ownership types can be used to successfully predict strategic group memberships in China's emerging economy.
In this study, we investigate how multinationality affects firms’ risk levels. Our investigation builds on the idea from real options theory that international operations offer switching options to multinational corporations, yet we also emphasize different sources of coordination costs that can mitigate the benefits of operational flexibility. The findings from Tobit models accounting for self-selection underscore the importance of unobserved heterogeneity in the relationships between international investments and risk levels. Consistent with the coordination costs surrounding international operations, we find that the relationship between multinationality and downside risk is curvilinear: risk first declines and then increases as a firm's portfolio of international investments becomes extensive. In addition, downside risk is an increasing function of the average cultural distance between a firm's home base and the host countries in which its foreign subsidiaries operate. Journal of International Business Studies (2007) 38, 215–230. doi:10.1057/palgrave.jibs.8400260
This article extends signaling theory to research on acquisition premiums and investigates the value that newly public targets capture in post-IPO acquisitions. We complement previous research on acquisition premiums by suggesting that signals about targets can enhance sellers' gains by reducing acquirers' offer price discounting that is due to information asymmetries. Specifically, we argue that target firms can engage in interorganizational relationships (e.g., associations with prominent investment banks, venture capitalists, and alliance partners) that function as signals and enhance sellers' gains. Empirical evidence shows that the benefits of such signals apply to domestic and cross-border deals alike and that these benefits are even greater for IPO targets selling their companies to acquirers based in different industries.
This article empirically investigates the determinants of firms’ use of explicit call options to acquire equity in their international joint ventures (IJVs). Such options are an important contractual element of IJVs because they allow a firm to secure a claim on future expansion opportunities and to safeguard itself against various exchange hazards. The authors therefore draw on real options and transaction cost arguments, respectively, to develop hypotheses on the circumstances under which firms use such options. The article underscores the importance of studying the design of alliances in finer grained terms and helps refine the application of real options theory in the alliance context.
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