EconPapers    
Economics at your fingertips  
 

Actualization of growth potential in international joint ventures: The moderating effects of localization strategies

Sangcheol Song

Journal of World Business, 2020, vol. 55, issue 2

Abstract: We employ the growth options perspective to examine how multinational corporations’ localization strategies facilitate the actualization of growth potential preserved in international joint ventures (IJVs). This study uses a data of Korean IJVs; it accounts for the endogeneity associated with a firm’s decision to exercise growth options through a two-stage model. We find that the enlarged IJVs, via conversion to majority ownership under reduced host market demand uncertainty, performed better. We also find that the realized growth potential are larger for IJVs that have more local business ties with other firms, or that hire more local employees. This study contributes to the growth options literature by examining the strategies that enable firms to exploit evolved exogenous uncertainty, and thus actualize upside growth potential.

Keywords: Multinational corporations; Growth options; International joint ventures; Host market uncertainty; Performance (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090951618306291
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:55:y:2020:i:2:s1090951618306291

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/bibliographic
http://www.elsevier. ... 620401/bibliographic

DOI: 10.1016/j.jwb.2019.101024

Access Statistics for this article

Journal of World Business is currently edited by David Collings and Jonathan Doh

More articles in Journal of World Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-06-30
Handle: RePEc:eee:worbus:v:55:y:2020:i:2:s1090951618306291