Academic Activities
[Research]When do wholly owned subsidiaries perform better than joint ventures?
2013.03.01 Views 1066 경영학연구분석센터
| Strategic Management Journal Volume 34, Issue 3; March 2013; Pages 317–337 SEA-JIN CHANG,(1) (*); JAIHO CHUNG,(2) and JON JUNGBIEN MOON (2) 1 NUS Business School, National University of Singapore, Singapore 2 Korea University Business School, Korea University, Seoul, Korea http://onlinelibrary.wiley.com/doi/10.1002/smj.2016/full Abstract This study explores when wholly owned subsidiaries outperform joint ventures with localpartners. In order to avoid the endogeneity problem inherent in foreign subsidiaries’ operatingmode decisions that might confound performance measurement, we employ the propensityscore matching method, along with the difference-in-differences approach, and compare t heperformances of joint ventures turned wholly owned subsidiaries vis-'a-vis continuing jointventures. Based on foreign subsidiaries’ financial data in China for 1998–2006, we find strongevidence that converted wholly owned subsidiaries outperform continuing joint ventures inindustries characterized by high levels of intangible assets such as technology or brand, aftercontrolling for factors that may affect the conversion decision. This finding is consistent with theprediction of transaction cost theory. Copyright 2012 John Wiley & Sons, Ltd. Keywords joint venture termination; entry mode choice;wholly owned subsidiaries; subsidiary performance; trans-action cost theory |