Bargaining power and the trade-off between the ownership and control of international joint ventures in China

Lee, Ji-Ren; Chen, Weiru; Kao, Charng

doi:10.1016/s1075-4253(98)00018-0

Cited by 37 publications

(33 citation statements)

References 36 publications

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“…The majority of the investigated literature concerned collaborative forms of strategy, such as mergers and acquisitions (Jemison and Sitkin, 1986;Walsh and Fahey, 1986;Dierickx and Koza, 1991), joint ventures (Brouthers and Bamossy, 1997;Lee, Chen, and Kao, 1998;Luo, 1999;Yan and Gray, 2001;Luo and Shenkar, 2002), or strategic alliances and outsourcing (Lippman and Rumelt, 2003). Taken together, these papers acknowledge the fact that specific strategic moves take place through high-level negotiations (Ring and van de Ven, 1994).…”

Section: Literature Review: the Gap At The Interplay Of Strategy And mentioning

confidence: 99%

Building theory on the negotiation capability of the firm: evidence from Ryanair

Caputo

Borbely

Dabić

2019

JKM

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Purpose: In an attempt to build upon existing theory, this paper investigates the potentially reciprocal relationship between negotiation and strategy, and strives to contribute towards a better understanding of the ways in which organizations negotiate.Design/methodology/approach: Built upon the integration of two different bodies of literature, negotiation and strategy, and on the analysis of the case of Ryanair, this paper argues for an integrated approach to negotiation and organizational capabilities. Findings:The case study allows for a clearer understanding of how negotiation capability can play a significant role in supporting the creation and sustainment of competitive advantage, even under unfavorable industry settings.Originality/value: The paper contributes to theoretical development by offering new and insightful explanations of firms' behavior, moving beyond the classic interpretation of industry dynamics, such as bargaining power. This study has implications for both practice and research, as it offers a better and more holistic understanding of the strategy making process and the foundations of its success.

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Section: Literature Review: the Gap At The Interplay Of Strategy And mentioning

confidence: 99%

Building theory on the negotiation capability of the firm: evidence from Ryanair

Caputo

Borbely

Dabić

2019

JKM

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“…In the same vein, Brouthers and Bamossy (2006) argue that changes in IJV structure and control relationships may result in lower transaction costs and improved IJV performance. In managing IJVs, Lee, Chen, and Kao (1998) suggest that foreign parent firms need to adopt a flexible mindset. Groot and Merchant (2000) suggested that IJV performance is directly related to parents firms' attitudes toward control.…”

Section: Foreign Parent Control Choice In the Formation Stage Of The mentioning

confidence: 99%

Parent Control Dynamics and International Joint Venture Performance

Le¹

2009

IJBM

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This article examines the relationship between foreign parent control and International Joint Venture (IJV) performance over the lifecycle of the IJV. Following Geringer and Hebert (1989);Glaister, Husan, and Buckley (2005), Nguyen and Larimo (2008), the paper conceptualizes foreign parent control across three dimensions including mechanism, focus, and extent. The empirical evidence is based on an analysis of 49 Finnish IJVs established in the 1990s. The result shows that foreign parent firms who adopted a control dynamic approach will see better IJV performance. Broad, tight, and formal control exercised by foreign parent firms over their IJVs leads to better performance of those IJVs in the formation stage. When the performance of an IJV is viewed negatively, foreign parent firms who exercise more control over IJVs will see better IJV performance in the post-formation stage. In contrast, when IJV performance is positive in the formation stage, foreign parent firms are likely to exercise less control over the IJV in the post-formation stage.

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“…In this spirit, Chari and Chang (2009) demonstrate that cultural distance between the home and host country has a positive effect on incentives for local managers. For China, Lee, Chen, and Kao (1998) show that when the local partner in the EJV is connected to the local government, the level of its equity ownership is higher. Moreover, many case studies on EJVs find a negative effect of foreign equity shares on local government involvement in creating the right business atmosphere (for example Prahalad and Hamel 1990;Luo 2001;Root 1988;Yan and Gray 1994).…”

Section: Introductionmentioning

confidence: 99%

“…However, China has not fully transited into a market economy, so that the role of local government is important in attracting FDI. In addition, the large heterogeneity in the quality of local governments is suggested to be a critical determinant for equity sharing in EJV (Lee, Chen, and Kao 1998;Zhao and Zhu 1998), and has important effects on the geographical distribution of FDI across Chinese provinces (Cole, Elliott, and Zhang 2006;Cheung and Lin 2004;Fu 2008). …”

Section: Introductionmentioning

confidence: 99%

Dual and Common Agency Issues in International Joint Ventures: Evidence From China

Roelfsema

Zhang

2013

Singapore Econ. Rev.

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With the help of a theoretical model we analyze the relation between equity sharing in an international joint venture (EJV) and local public goods provision in a setting where the local government faces a commitment problem to provide public services ex post to the set-up of the firm. We show that to overcome such a dual agency problem, the multinational leaves more local rents to the local partner than in the first-best, so as to provide stronger incentives for the government to supply public goods. Applying dynamic panel data estimation, we test the trade-off between local public goods and ownership shares across 31 Chinese provinces to find support for our mechanism

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Bargaining power and the trade-off between the ownership and control of international joint ventures in China

Cited by 37 publications

References 36 publications

Building theory on the negotiation capability of the firm: evidence from Ryanair

Building theory on the negotiation capability of the firm: evidence from Ryanair

Parent Control Dynamics and International Joint Venture Performance

Dual and Common Agency Issues in International Joint Ventures: Evidence From China

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