How family control influences FDI entry mode choice

2013 ◽  
Vol 19 (4) ◽  
pp. 367-385 ◽  
Author(s):  
Ming-Sung Kao ◽  
Anthony Kuo ◽  
Yi-Chieh Chang
Keyword(s):  
Joint Ventures ◽  
Mode Choice ◽  
Entry Mode ◽  
Environmental Uncertainty ◽  
Listed Companies ◽  
Family Control ◽  
Empirical Results ◽  
Entry Mode Choice ◽  
Perceived Environmental Uncertainty ◽  
Wholly Owned Subsidiaries

AbstractThis study investigates how family control influences entry mode choice between joint ventures and wholly owned subsidiaries. Based on past studies revealing family-controlled firms’ unique concerns regarding the preservation of socioemotional wealth, the researchers posit that, firms with higher family control respond more drastically to perceived environmental uncertainty when choosing their entry mode. The researchers hypothesize that, when perceiving high environmental uncertainty, firms with higher versus lower family control are more likely to choose joint ventures. However, when perceiving low environmental uncertainty, firms with higher versus lower family control tend to choose wholly owned subsidiaries. The empirical results obtained from a sample of 1,644 investments undertaken by publicly listed companies in Taiwan support the hypotheses.

Subnational differences and entry mode performance: Multinationals in east and west China

2017 ◽  
Vol 26 (4) ◽  
pp. 426-444
Author(s):  
Anran Li ◽  
Brent Burmester ◽  
Peter Zámborský
Keyword(s):  
Host Country ◽  
Joint Ventures ◽  
Entry Mode ◽  
Performance Gap ◽  
Subsidiary Performance ◽  
West China ◽  
Entry Mode Choice ◽  
Entry Strategies ◽  
Country Analysis ◽  
Wholly Owned Subsidiaries

AbstractWe compare the influence of entry mode choice on subsidiary performance in two developmentally-differentiated regions of a developing host country. Analysis of 113 subsidiaries located in two provinces of China indicates that wholly owned subsidiaries outperform joint ventures in the developed region, whereas joint ventures outperform wholly owned subsidiaries in the less developed region. However, the smaller performance gap between wholly owned subsidiaries and joint ventures in the developed region indicates that the magnitude of influence of entry mode choices on performance varies across subnational regions. Firms must therefore be more discriminating in formulating entry strategies to regionally heterogeneous countries.

Governance, privatization and foreign direct investment

2018 ◽  
Vol 9 (4) ◽  
pp. 569-586
Author(s):  
Dongling Cai ◽  
Leonard Fengsheng Wang ◽  
Xiaokai Wu
Keyword(s):  
Social Welfare ◽  
Host Country ◽  
Foreign Firm ◽  
Mode Choice ◽  
Entry Mode ◽  
Mixed Duopoly ◽  
Economic Governance ◽  
Content Type ◽  
Entry Mode Choice ◽  
Optimal Degree

Purpose The purpose of this study is to investigate the interplay between economic governance and privatization, and how these two instruments affect the entry mode choice of the foreign firm and the social welfare of the host country. Design/methodology/approach This study constructs a mixed duopoly model wherein one domestic public firm competes with a foreign firm and investigates the influence of economic governance investment on the domestic government’s optimal degree of privatization choice and the foreign firm’s entry mode choice. Findings This study shows that (1) better economic governance enhances the effect of privatization on output, thus resulting in a lower degree of privatization; (2) the optimal privatization policy of the domestic government is partial privatization irrespective of the foreign firm’s entry mode choice; (3) with optimal investment by the domestic government on economic governance, the optimal degree of privatization is higher under FDI than export, and the host-country welfare is also higher under FDI. In particular, this study demonstrates that better economic governance decreases the threshold of the degree of privatization when the foreign firm switches from export to FDI, implying that better economic governance stimulates the foreign firm to undertake FDI in the host country. Practical implications The findings shed some light on both the mixed ownership reform of the SOEs in China and attracting foreign capital inflow to improve the host country’s social welfare. Originality/value To the best of the authors’ knowledge, this study constitutes the first attempt to build a theoretical framework to explore how the interactions between economic governance and privatization influence the entry mode choice of the foreign firm.

Dimensionalizing international market entry mode choice

1997 ◽  
Vol 13 (1-3) ◽  
pp. 57-87 ◽  
Author(s):  
Angie M. Driscoll ◽  
Stanley J. Paliwoda
Keyword(s):  
Market Entry ◽  
Mode Choice ◽  
Entry Mode ◽  
International Market ◽  
Entry Mode Choice
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