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[Research]Pitting real options theory against risk diversification theory: International diversification and j
2013.01.01 Views 976 경영학연구분석센터
Journal of World Business
Volume 48, Issue 1, January 2013, Pages 122–136
Chris Changwha Chung (a), Seung-Hyun Lee (b), (1), Paul W. Beamish (c), (2), Colette Southam (d), (3), Daeil (Dale) Nam (a), (4),
a Korea University Business School, Korea University, Seoul, Republic of Korea
b School of Management, University of Texas at Dallas, Richardson, TX, USA
c Richard Ivey School of Business, University of Western Ontario, London, Ontario, Canada
d Faculty of Business, Bond University, Queensland, Australia
http://www.sciencedirect.com/science/article/pii/S1090951612000508
Abstract
This study examines how MNE divestment decisions differ according to real options vs. risk diversification perspectives. We develop competing hypotheses in relation to international diversification and joint ownership control. Empirical results give consistent support to the real options perspective. We find that large MNEs with greater international diversification are less likely to divest their subsidiaries during times of economic crisis. The negative effect of joint ownership control is however manifested in both crisis-stricken and non-crisis country subsidiaries as well as in their interaction effect.
Keywords
Real options; Risk diversification; Economic crisis; International diversification; Joint ventures; Subsidiary divestment
Volume 48, Issue 1, January 2013, Pages 122–136
Chris Changwha Chung (a), Seung-Hyun Lee (b), (1), Paul W. Beamish (c), (2), Colette Southam (d), (3), Daeil (Dale) Nam (a), (4),
a Korea University Business School, Korea University, Seoul, Republic of Korea
b School of Management, University of Texas at Dallas, Richardson, TX, USA
c Richard Ivey School of Business, University of Western Ontario, London, Ontario, Canada
d Faculty of Business, Bond University, Queensland, Australia
http://www.sciencedirect.com/science/article/pii/S1090951612000508
Abstract
This study examines how MNE divestment decisions differ according to real options vs. risk diversification perspectives. We develop competing hypotheses in relation to international diversification and joint ownership control. Empirical results give consistent support to the real options perspective. We find that large MNEs with greater international diversification are less likely to divest their subsidiaries during times of economic crisis. The negative effect of joint ownership control is however manifested in both crisis-stricken and non-crisis country subsidiaries as well as in their interaction effect.
Keywords
Real options; Risk diversification; Economic crisis; International diversification; Joint ventures; Subsidiary divestment