The Relative Performance of Joint Ventures and Wholly-Owned Subsidiaries and the Reasons why they exit

The Case of Dutch Foreign Subsidiaries

Masterarbeit , 2009 , 60 Seiten , Note: 2,0

BWL - Unternehmensführung, Management, Organisation

Using data on more than 200 foreign entries made by Dutch MNEs between 1995 and 2003, this study examines the relative performance of jointly-owned and wholly-owned affiliates and sheds light on the underlying reasons why these two types of affiliates exit. By employing performance measures such as average longevity and exit rate, and by differentiating between exits through liquidations and those through sell-offs, I find that there are no essential performance differences between WOSs and JVs, which is in line with the results of prior scholarship (e.g. Dang, 1977; Chowdhury, 1992; Chan, 1995; Mata & Portugal, 2000; Pangarkar & Lim; 2003; Delios & Beamish, 2004). Furthermore, the findings reveal that both WOSs and JVs mainly exit voluntarily. The most prevalent reason for WOS exit is strategic restructuring, whereas the most common reason for JV exit is fierce competition in the host market. Finally, I discover supporting evidence for the proposition that MNE parents are more likely to buy out local partners from JVs over which they have majority ownership than from JVs over which they have minority ownership.

Table of Contents

Abstract

1. Introduction

2. Literature Review
2.1 Introduction
2.2 Advantages and Disadvantages of WOSs and JVs
2.2.1 Advantages of WOSs
2.2.2 Disadvantages of WOSs
2.2.3 Advantages of JVs
2.2.4 Disadvantages of JVs
2.3 Theoretical Arguments and Empirical Findings concerning WOS and JV Performance
2.3.1 Introduction
2.3.2 JVs outperform WOSs
2.3.3 WOSs outperform JVs
2.3.4 WOSs and JVs perform equally well
2.3.5 Summary
2.4 Reasons for the Exit of Foreign Subsidiaries
2.4.1 Introduction
2.4.2 Forced Exits
2.4.3 Voluntary Exits
2.4.4 Summary

3. Propositions
3.1 Introduction
3.2 Average Longevity and Exit Rate
3.3 Exits through Sell-offs and Exits through Liquidations
3.4 Reasons for Exits
3.5 Changes in Ownership Structure

4. Methodology
4.1 Introduction
4.2 Original Sample
4.3 Data Collection and Final Sample
4.4 Performance Measures used to test Propositions 1a through 2b
4.5 Testing Propositions 3a, 3b, and

5. Results
5.1 Introduction
5.2 Average Longevity and Exit Rate
5.3 Exits through Sell-offs and Exits through Liquidations
5.4 Reasons for Exits
5.5 Changes in Ownership Structure

6. Conclusion
6.1 Introduction
6.2 Discussion and Conclusion
6.3 Managerial and Academic Implications
6.4 Limitations and Suggestions for Further Research

References

Appendix A - Questionnaire on Subsidiary Status

Appendix B - Exit Data

Appendix C - Results of the T-test and Chi-Square Tests

Affidavit

• Hochschule: Universiteit van Amsterdam
• Note: 2,0
• Autor: Matthias Otto (Autor:in)
• Erscheinungsjahr: 2009
• Seiten: 60
• Katalognummer: V155996
• ISBN (eBook): 9783640694211
• ISBN (Buch): 9783640695140
• Sprache: Englisch
• Schlagworte: subsidiary performance, exits, ownership mode, joint ventures, wholly-owned subsidiaries, dutch, MNE, multinational, enterprise