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Dynamics of Experience, Environment and MNE Ownership Strategy

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Abstract

  • This study investigates the conditions under which environmental and firm-level factors affect MNE ownership strategy.

  • We theorize that these effects are related to changes over time, which we subdivide into the aspects of absolute and relative magnitude.

  • We develop and test four hypotheses using longitudinal data on Japanese foreign direct investment (FDI).

  • At the environmental level, the proliferation of FDI opportunities significantly increases the use of international joint ventures (IJVs).

  • At the firm level, increase in FDI experience has a significant positive effect on the use of IJVs.

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Notes

  1. For example, Chang and Rosenzweig (2001) found that a firm’s decisions for initial entry modes are different from subsequent entries.

  2. Only Greenfield and expansion FDIs were counted.

  3. NLFC is a Japanese government-owned financial institution, which is established under Japanese law. It provides various kinds of business loans to small and medium-sized enterprises (SMEs). NLFC defines firms with less than twenty employees as Small-Scale Enterprises. Firms must have at least fifty employees to qualify as a SME (NLFC 2003).

  4. When we applied a two-year lag for the environmental variables, we found qualitatively similar results.

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Acknowledgements

This research was supported by a Social Sciences and Humanities Research Council of Canada Grant (#411-98-0393).

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Authors and Affiliations

  1. Henry W. Bloch School of Business & Public Administration, University of Missouri-Kansas City, Kansas City, USA

    Jae C. Jung

  2. Richard Ivey School of Business, The University of Western Ontario, London, Canada

    Paul W. Beamish

  3. Donald R. Sobey Professor of International Business, Queen’s School of Business, Queen’s University, Kingston, Canada

    Anthony Goerzen

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  1. Jae C. Jung
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  2. Paul W. Beamish
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Correspondence to Jae C. Jung.

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Jung, J., Beamish, P. & Goerzen, A. Dynamics of Experience, Environment and MNE Ownership Strategy. Manag Int Rev 50, 267–296 (2010). https://doi.org/10.1007/s11575-010-0039-y

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