Equity Versus Non-Equity International Strategic Alliances: The Role of Host Country Governance Management

42 Pages Posted: 13 May 2007

See all articles by Steven Globerman

Steven Globerman

Western Washington University - Center for International Business

Bo Bernhard Nielsen

Copenhagen Business School - Department of Strategic Management and Globalization

Abstract

A substantial literature has evolved focusing on the ownership structure of international strategic alliances (ISAs). Most of the relevant studies are theoretical in nature and concentrate on the conceptual factors that influence the choice between equity and non-equity structures. A smaller number of studies provide some empirical evidence on the importance of some of the conceptual factors. The theoretical literature highlights the potential influence of relational capital and transaction costs as determinants of ISA structure; however, there is little empirical evidence on the relative importance of these potential determinants. Moreover, there is only limited and indirect evidence bearing upon the impact of host country governance attributes on ISA ownership structure. In this study, we provide statistical evidence on the importance of potential determinants of governance mode choice for a sample of ISAs involving Danish firms. Our study documents how the determinants of governance mode choice vary in importance depending upon the "quality" of the governance infrastructure of the host country.

Keywords: Relational Capital, Governance, International Strategic Alliance

Suggested Citation

Globerman, Steven and Nielsen, Bo Bernhard, Equity Versus Non-Equity International Strategic Alliances: The Role of Host Country Governance Management. Available at SSRN: https://ssrn.com/abstract=985888 or http://dx.doi.org/10.2139/ssrn.985888

Steven Globerman

Western Washington University - Center for International Business ( email )

Parks Hall 342
Bellingham, WA 98225-9170
United States
360-650-7288 (Phone)
360-650-4844 (Fax)

Bo Bernhard Nielsen (Contact Author)

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Porcelænshaven 24
Frederiksberg, 2000
Denmark
+45 3815 3030 (Phone)
+45 2815 3035 (Fax)

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