Ownership Control of Foreign Affiliates: A Property Rights Theory Perspective

Driffield, Nigel; Mickiewicz, Tomasz; Temouri, Yama

doi:10.5465/ambpp.2016.12648abstract

Cited by 11 publications

(23 citation statements)

References 34 publications

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“…In this context, property rights theory stresses that it is optimal for ownership control to rest with those who have the greatest impact on the value of the venture (Meyer et al, 1992). Driffield et al (2016) argue that ownership structure follows the evolution in the value contributed by each partner, this explains why in our case the share of the government decreased.…”

Section: Ownership Evolution Follows the Relative Contribution Of Shamentioning

confidence: 59%

“…Our focus on ownership evolution also implies that our analysis contributes to the literature based on property rights theory perspective (Driffield et al, 2016). We argue that as such entrepreneurial ventures become more secure and transaction costs are overcome, government involvement can decrease, whilst other corporate interests can increase.…”

Section: Introductionmentioning

confidence: 77%

“…Moreover, both the ex-ante contractual arrangements, and any ex-post, post-entry ownership changes are of interest. The latter are driven by both evolving firm-level characteristics and by their complementarity with the features of the country-specific institutional environments (Driffield et al, 2016;Liou et al, 2016).…”

Section: Transaction Costs and Institutional Voidsmentioning

confidence: 99%

“…More generally, Driffield et al (2016) argue that it is important to start the international business micro enquiry with the question "what is best for the joint venture (JV)?" rather than "what is good for each partner?"…”

Section: Ownership Evolution Follows the Relative Contribution Of Shamentioning

confidence: 99%

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New venture evolution of migrants under institutional voids: Lessons from Shonga Farms in Nigeria

Mickiewicz

Olarewaju

2020

International Small Business Journal

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This article inductively builds theory on how transaction costs may be alleviated and institutional voids bridged in developing economies, based on the case study of successful migrant entrepreneurial involvement in Nigerian agriculture: Shonga Farms. We argue that the iterative process of building conditions of trust through long-term commitment, involvement of regional government, appropriate modes of financial contracts and the gradual transitioning of controlling interests to private actors are factors of success. We draw additional lessons by contrasting our case study with other similar migrant schemes that have failed.

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Section: Ownership Evolution Follows the Relative Contribution Of Shamentioning

confidence: 59%

Section: Introductionmentioning

confidence: 77%

Section: Transaction Costs and Institutional Voidsmentioning

confidence: 99%

Section: Ownership Evolution Follows the Relative Contribution Of Shamentioning

confidence: 99%

See 2 more Smart Citations

New venture evolution of migrants under institutional voids: Lessons from Shonga Farms in Nigeria

Mickiewicz

Olarewaju

2020

International Small Business Journal

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“…It follows that negative influences, institutional voids (Khanna and Palepu 2005) and high country risks in general should have adverse consequences for inward FDI via L-advantages. This is confirmed by the meta-study of Bailey (2018), by Driffield et al (2016), and by Goswami and Haider (2014); who find FDI was discouraged by such factors as corruption, tax rates and cultural distance.…”

mentioning

confidence: 67%

The Attraction of FDI to Conflicted States: The Counter-Intuitive Case of US Oil and Gas

et al. 2019

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States burdened with conflict have been considered to be undesirable destinations for foreign direct investment (FDI) due to, inter alia, political instability, regulatory unpredictability, and expropriation risk. However, we develop an alternative view based on corporate governance and real option theories. We analyze a dataset of FDI location decisions made in the Oil and Gas sector by 250 US firms across 44 countries between 2007 and 2013. After controlling for energy reserves, the results show counter-intuitively, that civil war and terrorism risks, and terrorist events are positively associated with US investment in Oil and Gas. US subsidiaries also show high levels of ownership commitment. It is tempting to conclude that US Oil and Gas is a wholly unique, resource-bound case, but we argue that this disconnect may have occurred for two reasons. First, a threat of conflict and violence can make MNEs exercise their growth options and expand resource extraction sooner rather than later. Second, political instability does not necessarily lead to higher levels of FDI expropriation risk. On the contrary, instability can reduce the incentives for the state to seize assets from technologically superior MNEs, i.e. it may reduce expropriation risk. Just as the rule of law and 'good' governance can constrain a state from expropriation, there are theoretical reasons why 'bad' governance resulting from instability and incapacity may do so, too.

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National institutional systems, foreign ownership and firm performance: The case of understudied countries

Carney

Estrin

Liang

et al. 2019

Journal of World Business

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We analyse the relationship between institutional systems (configurations of countries with similar institutional characteristics) and firm performance. We use a large sample of firms from understudied countries to explore whether the performance impact of these configurations is the same ("equifinality"), whether this holds across different measures of firm performance ("Tversky effect"), and whether some institutional configurations better support foreign-owned firms. We find that it is possible to rank institutional systems according to their impact on firm performance, but the ranking differs according to the performance measure. Although foreign ownership on average confers performance advantages, the magnitude of the impact depends on the configuration. Our findings contribute to the understanding of the importance of institutional similarities across countries, and to the implications of these similarities for the theory of the MNE.

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Ownership Control of Foreign Affiliates: A Property Rights Theory Perspective

Cited by 11 publications

References 34 publications

New venture evolution of migrants under institutional voids: Lessons from Shonga Farms in Nigeria

New venture evolution of migrants under institutional voids: Lessons from Shonga Farms in Nigeria

The Attraction of FDI to Conflicted States: The Counter-Intuitive Case of US Oil and Gas

National institutional systems, foreign ownership and firm performance: The case of understudied countries

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