Institutional and transaction cost influence on partnership structure of foreign affiliates

Mehmet Demirbag, Ekrem Tatoglu, Keith Glaister

    Research output: Contribution to journalArticle

    22 Citations (Scopus)

    Abstract

    This paper considers the determinants of foreign affiliate structure in the context of foreign equity ventures in Turkey. Institutional variables and transaction costs variables are examined as determinants of choice between wholly owned subsidiary, dyadic joint venture and multi-partner joint venture.
    The findings support the majority of the hypotheses. We find that research and development (R&D) intensity, cultural distance, location of affiliate, affiliate size, political risk and corruption perception distances are particularly important in determining the choice of affiliate structure. Some partial support has also been found for the impact of foreign direct investment (FDI) concentration and linguistic distance on partnership structure of foreign affiliates. No support, however, has been noted for the effect of advertising intensity of the target industry. Both transaction cost specific and institution specific variables were found to be significant in explaining affiliate formation decisions.
    LanguageEnglish
    Pages709-745
    Number of pages37
    JournalManagement International Review
    Volume50
    Issue number6
    DOIs
    Publication statusPublished - Dec 2010

    Fingerprint

    Transaction costs
    Foreign affiliates
    Joint ventures
    Wholly owned subsidiary
    Institutional variables
    Cultural distance
    Variable cost
    Equity
    Foreign direct investment
    R&D intensity
    Industry
    Political risk
    Corruption
    Turkey
    Venture

    Keywords

    • institutional variables
    • transaction cost variables
    • FDI
    • dyadic JVs
    • multipartner JVs
    • wholly owned subsidiaries
    • Turkey
    • cost influence
    • partnership structure
    • foreign affiliates

    Cite this

    Demirbag, Mehmet ; Tatoglu, Ekrem ; Glaister, Keith. / Institutional and transaction cost influence on partnership structure of foreign affiliates. In: Management International Review. 2010 ; Vol. 50, No. 6. pp. 709-745.
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    Institutional and transaction cost influence on partnership structure of foreign affiliates. / Demirbag, Mehmet; Tatoglu, Ekrem; Glaister, Keith.

    In: Management International Review, Vol. 50, No. 6, 12.2010, p. 709-745.

    Research output: Contribution to journalArticle

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