Acquisition of local market information in international joint ventures: service sectors

Abstract

This research attempts to identify key factors affecting the acquisition of local market information in foreign majority-owned international joint ventures (IJVs). By using Spearman rank correlation coefficient and ordinary least squares regression, we reveal that most of the factors included in our model play a pivotal role in enhancing learning for foreign parents of IJVs. These results contribute to current knowledge by filling several research gaps and provide useful and practical implications for multinational enterprises.

Reverse knowledge transfer from subsidiaries to MNCs in Korea: size matters

“…Yang, Mudambi and Meyer (2008) also argued that the knowledge development capabilities of the subsidiaries are crucial to RKT because timely transfer, and the sharing and usage of knowledge developed by the subsidiaries is essential to MNCs' competitiveness and success. In addition, Noorderhaven and Harzing (2009) Park, 2012). In this sense, the capability for acquiring new knowledge is based primarily on the similarities between the prior related knowledge held by knowledge possessors and learners.…”

“…The efficient absorption of LMI is decisive for MNCs to achieve organizational competitiveness as it will be a crucial factor in the determination of the success of direct investment in foreign markets (Park et al, 2012). Pearce and his colleagues (Manea and Pearce, 2006;Manolopoulos et al, 2005;Pearce and Papanastassiou, 2006) shed light on the role of subsidiaries in the knowledge management process within MNC networks.…”

Reverse knowledge transfer from subsidiaries to MNCs in Korea: size matters

“…This means that rich communication media are essential for the transmission of tacit information. In particular, as much of market relevant knowledge, such as LMI, is tacit knowledge that is embedded in organizational practices and the cognitive structure of human bodies, the feasibility of its transfer requires intensive interactions between knowledge receivers and the transferors (Park et al, 2012).…”

“…Organizational distance, which affects international businesses, has been seen commonly as a multi-faceted construct that includes cultural, administrative, geographic, and economic aspects (Ambos and Ambos, 2009). According to conventional wisdom, the greater the organizational incongruence, the less likely it is that valuable knowledge and necessary information will be readily available to the learning organization (Park et al, 2012). Organizational distance is also associated with higher transaction costs generated by the difficulty of transferring skills, information and competencies.…”

Capital Structure of Foreign Affiliates and the Investment Decision: Two Questions to Consider

“…for the investing firm, given that -as different papers remark -the ownership structure affects firms' performance (Chang et al 2013;Rasheed 2005;Brouthers et al 2003;Siripaisalpipat, Hoshino 2000), business opportunities for local firms (Prashantham, Birkinshaw 2008;Akande et al 2010;Miozzo et al 2012), the rest of the financial structure (Schindler, Schjelderup 2012), the knowledge of the local foreign market (Park et al 2012), and even the probability of failure of the project (Hennart, Zeng 2002). Therefore, it is not surprising that normative consequences may emerge from this research topic in order to know ex-ante the optimal mode of entry.…”