Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures

Barkema, Harry G.; Shenkar, Oded; Vermeulen, Freek; Bell, John

doi:10.5465/256889

Cited by 93 publications

(83 citation statements)

References 49 publications

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“…The measure of cultural distance using the institutional collectivism, in-group collectivism and power distance dimension was also calculated in a similar fashion. We use these cultural distance measures rather than Kogut and Singh's (1988) index because the 'assumption of equivalence' across the four cultural dimensions in the aggregated index has been characterized as highly problematic, and because the uncertainty avoidance dimension has been suggested as potentially the most salient, while the individualism dimension has also been noted as important by some (Barkema et al, 1997;Shenkar, 2001, p. 525).…”

Section: Level Of Cbmanda Activity In the Target Countrymentioning

confidence: 99%

Equity Ownership in Cross‐border Mergers and Acquisitions by British Firms: An Analysis of Real Options and Transaction Cost Factors

Ahammad

Leone

Tarba

et al. 2017

British J of Management

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The authors investigate the factors influencing the share of equity ownership sought in cross‐border mergers and acquisitions (CBM&As). Drawing on real options theory and transaction cost economics (TCE), they address and hypothesize key factors linked to commitment under exogenous uncertainty and the separation of desired and non‐desired assets’ influence on share of equity sought by acquiring firms in CBM&As. Empirical analysis based on 1872 CBM&As undertaken by British firms in both developed and emerging economies shows that British MNEs are more likely to pursue a partial acquisition in a target foreign firm when those foreign firms are from culturally distant countries. Further, findings support the view that the high cost of separating desired assets from non‐desired assets motivates firms to make a partial acquisition rather than acquire the target completely. This is one of the first studies to use real options theory to address the cost of commitment under exogenous uncertainty, as well as TCE logic to address the separation of desired and non‐desired assets in the target firm while analysing equity ownership sought in CBM&As. Empirically, this paper contributes by examining CBM&As by British firms in both developed and emerging markets.

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Section: Level Of Cbmanda Activity In the Target Countrymentioning

confidence: 99%

Equity Ownership in Cross‐border Mergers and Acquisitions by British Firms: An Analysis of Real Options and Transaction Cost Factors

Ahammad

Leone

Tarba

et al. 2017

British J of Management

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“…Having experienced changes and observed the change patterns during prior operations, MNEs will be more capable of recognizing similar patterns and be more aware of the emergence of changes in their current foreign operations. In general, experiential learning is an accumulative process and, therefore, firms with greater experiential knowledge are also in a better position to learn (Barkema et al, 1997), as they can more effectively capture valuable information and more accurately interpret this information in order to guide their behaviors. Accordingly, MNEs with experiential knowledge in operating in an African region similar to the focal host country will be more responsive to the dynamic changes in that host country when making new entry mode decisions.…”

Section: Heterogeneity In the Responses Of Firms To Institutional Dynmentioning

confidence: 99%

Acquisition or greenfield entry into Africa? Responding to institutional dynamics in an emerging continent

Chen

Cui

et al. 2017

Global Strategy Journal

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Research Summary Foreign direct investment establishment mode literature has focused on the impact of unidimensional measures of institutional status, despite that institutional environments in emerging economies undergo substantial and continuous changes in multiple dimensions. This study integrates the dynamic institution‐based view with the theoretical construct of institutional competitive advantages to examine the heterogeneous strategic responses of investing firms to host country institutional dynamics. Empirical results from 2,245 FDIs into Africa during the period 2008–2013 show that multinational enterprises MNEs are more likely to adopt: (1) a greenfield mode in countries with rapid development of formal institutions; and (2) an acquisition mode in countries with rapid development of factor markets. Moreover, the regional experience of MNEs strengthens the first effect, while the institutional ties strengthen both effects. Managerial summary The dynamic development of a host country's institutional and factor market conditions is a critical consideration for multinational enterprises when entering emerging countries. By studying 2,245 foreign direct investments into Africa during the period 2008–2013, we find that MNEs are more likely to enter African countries that have formal institutions that are rapidly improving via greenfield investments. This is especially true for those MNEs with prior investment experience in Africa or with local government connections. We also find that acquisition modes are more likely to be adopted in African countries with rapidly improving factor market conditions, especially by MNEs with local government connections. We promote a dynamic perspective for MNEs for assessing business opportunities and entry modes in Africa. Copyright © 2016 Strategic Management Society.

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“…When parents have qualitative motives for forming a joint venture, then the subjective assessment of venture performance by parent firms is appropriate (see Geringer and Hébert 1991, for a review) with one such measure being longevity. In fact, longevity and survival correlate highly with subjective performance measures (Parkhe 1991;Barkema et al 1997). Thus it seems reasonable that in most instances, two firms engaged in an alliance will strive to maintain it so long as it is producing satisfactory results.…”

Section: Performancementioning

confidence: 99%

Alliance formation issues for knowledge‐based enterprises

Reid

Bussiere

Greenaway

2001

Int J Management Reviews

114

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Inter-firm collaboration among knowledge-intensive firms is increasing as a result of accelerating competition, falling regulatory barriers and rising customer expectations. Resource dependency theory is used to position knowledge as the key resource for the knowledge-based enterprise and to examine the suitability of alliances as a mode of knowledge acquisition and exchange, contrasted particularly with merger and acquisition. The alliance and knowledge literatures are reviewed, and particular attention is paid to the critical alliance formation stage. This stage is reviewed against a research model that posits firm performance in knowledge creation arises from a number of factors, including the motivation for an alliance, partner firm characteristics (the ability to develop and sustain valuable resources; absorptive capacity; combinative capability; experience with alliances; and appropriate design for knowledge exchange), the development of operating structures and norms, and the choice of alliance structure. The paper concludes with suggestions for future research.

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Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures

Cited by 93 publications

References 49 publications

Equity Ownership in Cross‐border Mergers and Acquisitions by British Firms: An Analysis of Real Options and Transaction Cost Factors

Equity Ownership in Cross‐border Mergers and Acquisitions by British Firms: An Analysis of Real Options and Transaction Cost Factors

Acquisition or greenfield entry into Africa? Responding to institutional dynamics in an emerging continent

Alliance formation issues for knowledge‐based enterprises

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