Flexibility versus commitment: MNEs' ownership strategy in China

• 成果类型: Article
• 署名作者: Li, Jing; Li, Yong
• 署名单位: Simon Fraser University; State University of New York (SUNY) System; University at Buffalo, SUNY
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/jibs.2010.25
• 发表日期: 2010
• 页码: 1550-1571
• 关键词: uncertainty; OWNERSHIP; strategy; Real options; flexibility; COMMITMENT; CHINA

摘要

We investigate the following important questions in international business How do multinational enterprises (MNEs) choose ownership strategies when facing strong uncertainty in foreign market entries? How are the choices affected by industry contingencies? Following the key tenets of real options theory, we propose that, under a high level of market uncertainty, MNEs choose more flexible (rather than more committed) ownership strategies that allow adjustment of investment decisions in future We further suggest that using flexible strategies in response to uncertainty becomes less valuable for MNEs when the industry they enter in the host country enjoys strong sales growth potential, requires less irreversible investments, and has intense competition Empirically, we analyze the ownership strategies (ownership structure and equity share) of over 5000 new foreign investments in manufacturing industries in China during 2000-2006 We find qualified support for our hypotheses, and discuss the industry boundary conditions of adopting flexible ownership strategies in foreign market entries Journal of International Business Studies (201 0) 41, 1550-1571 doi 10 1057/jibs 2010 25