Institutional Environment and Multinational Enterprises’ Post-Entry Choice: An Institutional Perspective

Despite using the international joint venture (IJV) as an important mode applied by multinational enterprises (MNEs) when entering emerging economies (Makino, Chan, Isobe and Beamish, 2007; Park and Ungson, 1997; Brouthers, 2002, Yiu and Makino, 2002), more and more IJVs are being converted into wholly foreign-owned subsidiaries (Dhanaraj and Beamish, 2004; Inkpen and Beamish, 1997; Franko, 1971; Harrigan, 1988; Kogut, 1989). Even though conversions from IJV (partially owned by MNEs) to wholly foreign-owned subsidiaries are prevalent in emerging economy contexts at the present time, factors influencing MNEs’ ownership decisions about their IJVs’ conversion are still unclear in international business research.