Top

Management International Review

Published in:

01-11-2008 | Research Article

Institutional Explanations of Cross-border Alliance Modes: The Case of Emerging Economies Firms

Authors: Snejina Michailova, Siah Hwee Ang

Published in: Management International Review | Issue 5/2008

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract and Key Results

Using a sample of 628 cross-border alliances established by emerging economies firms across 25 manufacturing and service industries in 64 host countries in the period 1995-2004, we investigate the effect of institutional factors on the adoption of equity alliance mode.
The findings of this study contribute to empirical research in institutional theory, institutional explanations of cross-border alliances and strategic behavior of emerging economies firms.
We find support for institutional explanations of the adoption of equity alliance mode by emerging economies firms.
We also find that institutional effects are contingent on the alliance location. When emerging economies firms establish alliances in developed host countries, their governance choice is most influenced by the normative pillar, followed by the cognitive pillar, with the regulatory pillar having a negligible effect. When the host countries are emerging economies, the regulatory pillar has the strongest influence followed by the cognitive pillar, with the normative pillar having an insignificant effect.

previous article Entry Modes for Manufacturers’ International After-Sales Service: Analysis of Transaction-specific, Firm-specific and Country-specific Determinants

next article Home Country Image, Country Brand Equity and Consumers’ Product Preferences: An Empirical Study

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Management International Review

MANAGEMENT INTERNATIONAL REVIEW is a double-blind refereed journal that aims at the advancement and dissemination of research in the fields of International Management.

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Ang, S. H./Michailova, S., Emerging Economies Firms’ Expansion in the European Union: Acquisitions versus Alliances, European Journal of International Management, 1, 4, 2007, pp. 315–328.

Arregle, J.-L./Hébert, L./Beamish, P.W., Mode of International Entry: The Advantage of Multilevel Methods, Management International Review, 46, 5, 2006, pp. 597–618.

Barringer, B. R./Harrison, J. S., Walking a Tightrope: Creating Value through Interorganizational Relationships, Journal of Management, 26, 3, 2000, pp. 367–403.

Burgers, W. P./Hill, C. W. L./Kim, W. C., A Theory of Global Strategic Alliances: The Case of the Global Auto Industry, Strategic Management Journal, 14, 6, 1993, pp. 419–432.

Casson, M./Mol, M. J., Strategic Alliances: A Survey of Issues from an Entrepreneurial Perspective, in Shenkar, O./Reuer, J. J. (eds.), Handbook of Strategic Alliances, Thousand Oaks: Sage Publications 2006, pp. 17–37.

Chan, C. M./Makino, S., Legitimacy and Multi-level Institutional Environments: Implications for Foreign Subsidiary Ownership Structure, Journal of International Business Studies, 38, 4, 2007, pp. 621–638.

Chan, C. M./Makino, S./Isobe, T., Interdependent Behavior in Foreign Direct Investment: The Multi-level Effects of Prior Entry and Prior Exit on Foreign Market Entry, Journal of International Business Studies, 37, 5, 2006, pp. 642–665.

Chen, R./Boggs, D. J., Long Term Cooperation Prospects in International Joint Ventures: Perspectives of Chinese Firms, Journal of Applied Management Studies, 7, 1, 1998, pp. 111–126.

Chittoor, R./Ray, S., Internationalization Paths of Indian Pharmaceutical Firms: A Strategic Group Analysis, Journal of International Management, 13, 3, 2007, pp. 338–355.

Chung, S./Singh, H./Lee, K., Complementarity, Status Similarity and Social Capital as Drivers of Alliance Formation, Strategic Management Journal, 21, 1, 2000, pp. 1–22.

Dawar, N./Frost, T., Competing with Giants: Survival Strategies for Local Companies in Emerging Markets, Harvard Business Review, 77, 2, 1999, pp. 119–129.

DiMaggio, P. J./Powell, W. W., The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields, American Sociological Review, 48, 2, 1983, pp. 147–160.

Eisenhardt, K. M./Schoonhoven, C. B., Resource-based View of Strategic Alliance Formation: Strategic and Social Effects in Entrepreneurial Firms, Organization Science, 7, 2, 1996, pp. 136–150.

Fladmoe-Lindquist, K./Jacque, L. L., Control Modes in International Service Operations: The Propensity to Franchise, Management Science, 41, 7, 1995, pp. 1238–1249.

Folta, T. B./Miller, K. D., Real Options in Equity Partnerships, Strategic Management Journal, 23, 1, 2002, pp. 77–88.

Garg, M./Delios, A., Survival of the Foreign Subsidiaries of TMNCs: The Influence of Business Group Affiliation, Journal of International Management, 13, 3, 2007, pp. 278–295.

Geringer, J. M./Hébert, L., Measuring Performance of International Joint Ventures, Journal of International Business Studies, 22, 2, 1991, pp. 249–263.

Ghemawat, P., Semiglobalization and International Business Strategy, Journal of International Business Studies, 34, 2, 2003, pp. 138–152.

Giacobbe-Miller, J. K. et al., Country and Organizational-level Adaptation to Foreign Workplace Ideologies: A Comparative Study of Distributive Justice Values in China, Russia and the United States, Journal of International Business Studies, 34, 4, 2003, pp. 389–406.

Gimeno, J. et al., Explaining the Clustering of International Expansion Moves: A Critical Test in the US Telecommunications Industry, Academy of Management Journal, 48, 2, 2005, pp. 297–319.

Gong, Y. et al., Role Conflict and Ambiguity of CEOs in International Joint Ventures: A Transaction Cost Perspective, Journal of Applied Psychology, 86, 4, 2001, pp. 764–773.

Gulati, R./Singh, H., The Architecture of Cooperation: Managing Coordination Costs and Appropriation Concerns in Strategic Alliances, Administrative Science Quarterly, 43, 4, 1998, pp. 781–814.

Haunschild, P. R./Miner, A. S., Modes of Interorganizational Imitation: The Effects of Outcome Salience and Uncertainty, Administrative Science Quarterly, 42, 3, 1997, pp. 472–500.

Haveman, H. A., Follow the Leader: Mimetic Isomorphism and Entry into New Markets, Administrative Science Quarterly, 38, 4, 1993, pp. 593–627.

Hennart, J. F., A Transaction Costs Theory of Equity Joint Ventures, Strategic Management Journal, 9, 4, 1988, pp. 361–374.

Hennart, J. F./Zeng, M., Cross-cultural Differences and Joint Venture Longevity, Journal of International Business Studies, 33, 4, 2002, pp. 699–716.

Hitt, M. A. et al., The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China vs. Russia, Organization Science, 15, 2, 2004, pp. 173–185.

Hitt, M. A. et al., Partner Selection in Emerging and Developed Market Contexts: Resource-based and Organizational Learning Perspectives, Academy of Management Journal, 43, 3, 2000, pp. 449–467.

Hitt, M. A./Franklin, V./Zhu, H., Culture, Institutions and International Strategy, Journal of International Management, 12, 2, 2006, pp. 222–234.

Hofstede, G., Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations across Nations, 2^nd ed., Thousand Oaks: Sage Publications 2001.

Hoskisson, R. E. et al., Strategy in Emerging Economies, Academy of Management Journal, 43, 3, 2000, pp. 249–267.

Hu, Y.-S., The International Transferability of the Firm’s Advantages, California Management Review, 37, 4, 1995, pp. 73–88.

Kaufmann, D./Kraay, A./Mastruzzi, M., Governance Matters IV: Governance Indicators for 1996-2004, Washington: World Bank 2005.

Khanna, T./Palepu, K., Emerging Giants: Building World-class Companies in Developing Economies, Harvard Business Review, 84, 10, 2006, pp. 60–69.

Khanna, T./Palepu, K. G./Sinha, J., Strategies that Fit Emerging Markets, Harvard Business Review, 83, 6, 2005, pp. 63–76.

Kogut, B., Joint Ventures: Theoretical and Empirical Perspectives, Strategic Management Journal, 9, 4, 1988, pp. 319–332.

Kogut, B., Joint Ventures and the Option to Expand and Acquire, Management Science, 37, 1, 1991, pp. 19–33.

Kogut, B./Singh, H., The Effect of National Culture on the Choice of Entry Mode, Journal of International Business Studies, 19, 3, 1988, pp. 411–432.

Kogut, B./Walker, G./Kim, D. J., Cooperation and Entry Induction as an Extension of Technological Rivalry, Research Policy, 24, 1, 1995, pp. 77–95.

Lee, C./Beamish, P. W., The Characteristics and Performance of Korean Joint Ventures in LDCs, Journal of International Business Studies, 26, 3, 1995, pp. 637–654.

Leung, K./Wang, Z./Smith, P. B., Job Attitudes and Organizational Justice in Joint Venture Hotels in China: The Role of Expatriate Managers, International Journal of Human Resource Management, 12, 6, 2001, pp. 926–945.

Levitt, B./Nass, C., The Lid on the Garbage Can: Institutional Constraints on Decision Making in the Technical Core of College-text Publishers, Administrative Science Quarterly, 34, 2, 1989, pp. 190–207.

Lieberman, M. B./Asaba, S., Why do Firms Imitate Each Other?, Academy of Management Review, 31, 2, 2006, pp. 366–385.

Lin, X./Germain, R., Predicting International Joint Venture Interaction Frequency in U.S.-Chinese Ventures, Journal of International Marketing, 7, 2, 1999, pp. 5–23.

Lu, J. W., Intra- and Inter-organizational Imitative Behavior: Institutional Influences on Japanese Firms’ Entry Mode Choice, Journal of International Business Studies, 33, 1, 2002, pp. 19–37.

Luo, Y., Opportunism in Cooperative Alliances: Conditions and Solutions, in Shenkar, O./Reuer, J. J. (eds.), Handbook of Strategic Alliances, Thousand Oaks: Sage Publications 2006, pp. 55–79.

Luo, Y./Peng, M. W., Learning to Compete in a Transition Economy: Experience, Environment, and Performance, Journal of International Business Studies, 30, 2, 1999, pp. 269–295.

Luo, Y./Tung, R. L., International Expansion of Emerging Market Enterprises: A Springboard Perspective, Journal of International Business Studies, 38, 4, 2007, pp. 481–498.

Meyer, J. W./Rowan, B., Institutionalized Organizations: Formal Structure as Myth and Ceremony, American Journal of Sociology, 83, 2, 1977, pp. 340–363.

Meyer, J. W./Scott, W. R./Deal, T. E., Institutional and Technical Sources of Organizational Structure: Exploring the Structure of Education Organizations, in Meyer, J. W./Scott, W. R. (eds.), Organizational Environments: Ritual and Rationality, Beverley Hills: Sage Publications 1983, pp. 45–67.

Mizruchi, M. S./Fein, L. C., The Social Construction of Organizational Knowledge: A Study of the Uses of Coercive, Mimetic, and Normative Isomorphism, Administrative Science Quarterly, 44, 4, 1999, pp. 653–683.

North, D. C., Institutions, Institutional Change and Economic Performance, New York: Cambridge University Press 1990.

OECD, Trends and Recent Developments in Foreign Direct Investment, http://www.oecd.org/dataoecd/13/62/35032229.pdf 2005.

Oliver, C., Strategic Responses to Institutional Processes, Academy of Management Review, 16, 1, 1991, pp. 145–179.

Osborn, R. N./Baughn, C. C., Forms of Interorganizational Governance for Multinational Alliances, Academy of Management Journal, 33, 3, 1990, pp. 503–519.

Oxley, J. E., Institutional Environment and the Mechanisms of Governance: The Impact of Intellectual Property Protection on the Structure of Inter-firm Alliances, Journal of Economic Behavior and Organization, 38, 3, 1999, pp. 283–309.

Oxley, J. E./Sampson, R. C., The Scope and Governance of International R and D Alliances, Strategic Management Journal, 25, 8/9, 2004, pp. 723–749.

Palmer, D. A./Jennings, P. D./Zhou, X., Late Adoption of the Multidivisional Form by Large U.S. Corporations: Institutional, Political, and Economic Accounts, Administrative Science Quarterly, 38, 1, 1993, pp. 100–131.

Parkhe, A., Partner Nationality and the Structure-performance Relationship in Strategic Alliances, Organization Science, 4, 2, 1993, pp. 301–324.

Pisano, G. P., Using Equity Participation to Support Exchange: Evidence from the Biotechnology Industry, Journal of Law, Economics, and Organization, 5, 1, 1989, pp. 109–126.

Pothukuchi, V. et al., National and Organizational Culture Differences and International Joint Venture Performance, Journal of International Business Studies, 33, 2, 2002, pp. 243–265.

Prahalad, C. K./Lieberthal, K., The End of Corporate Imperialism, Harvard Business Review, 76, 4, 1998, pp. 69–79.

Roberts, P. W./Greenwood, R., Integrating Transaction Cost and Institutional Theories: Toward a Constrained-efficiency Framework for Understanding Organizational Design Adoption, Academy of Management Review, 22, 2, 1997, pp. 346–373.

Rugman, A. M./Verbeke, A., A Perspective on Regional and Global Strategies of Multinational Enterprises, Journal of International Business Studies, 35, 1, 2004, pp. 3–18.

Scott, W. R., Institutions and Organizations, Thousand Oaks: Sage Publications 1995.

Scott, W. R./Meyer, J. W., The Organization of Societal Sectors, in Meyer, J. W./Scott, W. R. (eds.), Organizational Environments: Ritual and Rationality, Beverley Hills: Sage Publications 1983, pp. 1–16.

Scott, W. R./Meyer, J. W., Institutional Environments and Organizations: Structural Complexity and Individualism, Thousand Oaks: Sage Publications 1994.

Shaver, J. M./Mitchell, W./Yeung, B., The Effect of Own-firm and Other-firm Experience on Foreign Direct Investment Survival in the United States, 1987-92, Strategic Management Journal, 18, 10, 1997, pp. 811–824.

Shenkar, O., Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences, Journal of International Business Studies, 32, 3, 2001, pp. 519–535.

Shenkar, O./Zeira, Y., Role Conflict and Role Ambiguity of Chief Executive Officers in International Joint Ventures, Journal of International Business Studies, 23, 1, 1992, pp. 55–75.

Starbuck, W. H., Organizations and Their Environments, in Dunnette, M. D. (ed.), Handbook of Industrial and Organizational Psychology, New York: Rand McNally 1976, pp. 1069–1123.

Suchman, M. C., Managing Legitimacy: Strategic and Institutional Approaches, Academy of Management Review, 20, 3, 1995, pp. 571–610.

UNCTAD, Key Data from WIR Annex Tables: Outward FDI Flows, by Host Region and Economy, 1970-2006, n.d.

UNCTAD, New UNCTAD Surveys: Foreign Direct Investment Prospects Promising for 2005-2008, http://www.un.org/News/Press/docs/2005/tad2029.doc.htm 2005.

Westphal, J./Gulati, R./Shortell, S. M., Customization or Conformity? An Institutional and Network Perspective on the Content and Consequences of TQM Adoption, Administrative Science Quarterly, 42, 2, 1997, pp. 366–394.

Williamson, O. E., Comparative Economic Organization: The Analysis of Discrete Structural Alternatives, Administrative Science Quarterly, 36, 2, 1991, pp. 269–296.

Witt, M. A./Lewin, A. Y., Outward Foreign Direct Investment as Escape Response to Home Country Institutional Constraints, Journal of International Business Studies, 38, 4, 2007, pp. 579–594.

World Bank, Country Groups, http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,contentMDK:20421402~pagePK:64133150~ piPK:64133175~theSitePK:239419,00.html 2005a.

World Bank, World Development Indicators 2005, http://web.worldbank.org/WBSITE EXTERNAL/DATASTATISTICS/0,,contentMDK:20523710~hlPK:1365919~menuPK:64133159~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html 2005b.

Wright, M. et al., Guest Editors’ Introduction: Strategy Research in Emerging Economies: Challenging the Conventional Wisdom, Journal of Management Studies, 42, 1, 2005, pp. 1–33.

Yiu, D./Makino, S., The Choice between Joint Venture and Wholly Owned Subsidiary: An Institutional Perspective, Organization Science, 13, 6, 2002, pp. 667–683.

Zaheer, S., Overcoming the Liability of Foreignness, Academy of Management Journal, 38, 2, 1995, pp. 341–363.

Zollo, M./Reuer, J. J./Singh, H., Interorganizational Routines and Performance in Strategic Alliances, Organization Science, 13, 6, 2002, pp. 701–713.

Zucker, L. G., The Role of Institutionalization in Cultural Persistence, American Sociological Review, 42, 5, 1977, pp. 726–743.

Title: Institutional Explanations of Cross-border Alliance Modes: The Case of Emerging Economies Firms
Authors: Snejina Michailova
Siah Hwee Ang
Publication date: 01-11-2008
Publisher: SP Gabler Verlag
Published in: Management International Review / Issue 5/2008
Print ISSN: 0938-8249
Electronic ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-008-0036-6

Springer Professional

Abstract and Key Results

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Management International Review

Springer Professional "Wirtschaft"

Other articles of this Issue 5/2008

Biblio Service

Entry Modes for Manufacturers’ International After-Sales Service: Analysis of Transaction-specific, Firm-specific and Country-specific Determinants

Erroneous Learning from the West? A Narrative Analysis of Chinese MBA Cases Published in 1992, 1999 and 2003

Home Country Image, Country Brand Equity and Consumers’ Product Preferences: An Empirical Study

FDI Ownership Strategy: A Japanese-US MNE Comparison