Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe

11 Pages Posted: 21 Apr 2011

See all articles by Klaus E. Meyer

Klaus E. Meyer

China Europe International Business School (CEIBS); Copenhagen Business School - Center for East European Studies (CEES)

Date Written: June 2001

Abstract

The process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed, and therefore inconsistent and unstable. This leads to high transaction costs for economic agents. Multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets. This paper analyzes how the costs of organizing business in transition environments influence entry mode choice. The empirical results show that host country institutions in transition economies, have an impact on the choice of entry modes. Moreover, different mechanisms determine the internalization of managerial and technological knowledge.© 2001 JIBS. Journal of International Business Studies (2001) 32, 357–367

Suggested Citation

Meyer, Klaus E., Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe (June 2001). Journal of International Business Studies, Vol. 32, Issue 2, pp. 357-367, 2001. Available at SSRN: https://ssrn.com/abstract=1817405 or http://dx.doi.org/10.1057/palgrave.jibs.8490957

Klaus E. Meyer (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://www.ceibs.edu/faculty/facultylist/09/100132.shtml

Copenhagen Business School - Center for East European Studies (CEES) ( email )

Porcelanshaven 24
2000 Frederiksberg
Denmark

HOME PAGE: http://www.klausmeyer.co.uk

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