The determinants of foreign partner's equity ownership in Southeast Asian joint ventures
Using a sample of 375 equity joint venture agreements between 2 partners in 6 Southeast Asian countries, we document the active role of Asian companies in driving the flow of joint venture activity in this region and provide a comparative analysis of joint ventures in transitional and non-transitional Southeast Asian countries. Specifically, we analyze the relationship between the foreign partner's equity ownership and partner uncertainty, the types of joint venture activities, and the frequency of transactions between the joint venture partners. In addition, we show that the relationship between the foreign partner's equity ownership and partner uncertainty, as proxied by cultural dissimilarity, depends on the types of joint venture activities. In the case of Vietnam, a transitional economy, the evidence suggests that, in the presence of a weak legal and regulatory system, foreign firms are entering the country on a smaller scale and are more prone to informal, relational contracting as a substitute for legal enforcement.
Year of publication: |
2007
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Authors: | Indro, Daniel C. ; Richards, Malika |
Published in: |
International Business Review. - Elsevier, ISSN 0969-5931. - Vol. 16.2007, 2, p. 177-206
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Publisher: |
Elsevier |
Keywords: | Equity joint ventures Foreign equity ownership Southeast Asia Transitional economies |
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