EconPapers    
Economics at your fingertips  
 

Foreign buyout of international equity joint ventures in China: When does performance improve?

Jing-Lin Duanmu and Thomas Lawton

Journal of World Business, 2021, vol. 56, issue 5

Abstract: Since the early 2000s, Sino-foreign equity joint ventures (JVs) have declined sharply as a predominant strategy for multinational enterprises (MNEs) to enter and operate in China. We study one of the contributory factors, foreign buyout, and its performance implications. By applying incomplete contract theory and an agency perspective, we provide micro evidence that superior post buyout performance is observed in converted wholly-owned subsidiaries (WOSs) with efficiency-seeking operations and subsequent CEO succession. The findings extend our understanding that ownership per se does not guarantee performance improvement. Instead, it is the alignment between ownership and the owner's inputs, and between ownership and the owner's managerial control, that give rise to performance improvement.

Keywords: International equity joint venture; Foreign buyout; Firm performance; CEO succession; Agency theory; Incomplete contract theory; Efficiency-seeking FDI; China (search for similar items in EconPapers)
Date: 2021
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/S1090951621000559
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:56:y:2021:i:5:s1090951621000559

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.2021.101243

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 2021-10-16
Handle: RePEc:eee:worbus:v:56:y:2021:i:5:s1090951621000559