TY - JOUR
T1 - Foreign direct investment mode choice
T2 - Entry and establishment modes in transition economies
AU - Dikova, Desislava
AU - Van Witteloostuijn, Arjen
PY - 2007/11/1
Y1 - 2007/11/1
N2 - In this study, we bridge two streams of foreign direct investment literature, specifically studies on establishment mode choice (i.e., the choice between an acquisition and a greenfield establishment) and studies on entry mode choice (i.e., the choice between a wholly owned outlet and a subsidiary with shared ownership). We arrive at a conceptual synthesis for an examination of the effects of the same predictors on the dual entry-establishment mode choice made in the context of a single foreign investment. We demonstrate that a parent firm's technological intensity, international strategy and experience determine both establishment and entry mode choices. Moreover, we apply Williamson's new institutional economics to investigate the influence of institution building on multinational enterprises' dual investment choice. In the context of transition economies, we test empirically the possible moderating effect of a host country's institutional environment. We conclude that the degree of the host country's institutional advancement moderates the effect of both technological intensity and international strategy on the establishment and entry mode choice.
AB - In this study, we bridge two streams of foreign direct investment literature, specifically studies on establishment mode choice (i.e., the choice between an acquisition and a greenfield establishment) and studies on entry mode choice (i.e., the choice between a wholly owned outlet and a subsidiary with shared ownership). We arrive at a conceptual synthesis for an examination of the effects of the same predictors on the dual entry-establishment mode choice made in the context of a single foreign investment. We demonstrate that a parent firm's technological intensity, international strategy and experience determine both establishment and entry mode choices. Moreover, we apply Williamson's new institutional economics to investigate the influence of institution building on multinational enterprises' dual investment choice. In the context of transition economies, we test empirically the possible moderating effect of a host country's institutional environment. We conclude that the degree of the host country's institutional advancement moderates the effect of both technological intensity and international strategy on the establishment and entry mode choice.
KW - Foreign entry and establishment mode choices
KW - Institutional advancement
KW - International strategy
KW - Technological intensity
UR - http://www.scopus.com/inward/record.url?scp=35448993978&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=35448993978&partnerID=8YFLogxK
U2 - 10.1057/palgrave.jibs.8400297
DO - 10.1057/palgrave.jibs.8400297
M3 - Article
AN - SCOPUS:35448993978
SN - 0047-2506
VL - 38
SP - 1013
EP - 1033
JO - Journal of International Business Studies
JF - Journal of International Business Studies
IS - 6
ER -