The Adoption of Corporate Governance Mechanisms: A Test of Competing Diffusion Models

N. Venkatraman, Lawrence Loh and Jeongsuk Koh
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N. Venkatraman: Boston University School of Management, Boston, Massachusetts 02215
Lawrence Loh: Faculty of Business Administration, National University of Singapore, 10 Kent Ridge Crescent, Singapore 0511
Jeongsuk Koh: Ilshin Investment Co., Ltd., 15-15 Yoido-dong, Youngdeungpo-ku, Seoul, Korea

Management Science, 1994, vol. 40, issue 4, 496-507

Abstract: We develop alternative diffusion models of two corporate governance mechanisms---joint venture and M-form organizational structure---using relevant concepts from the resource-based theory. Using data on joint venture adoption from one homogeneous industry (information technology) sector and employing both linear and nonlinear estimations, we test the explanatory power of the internal-influence model in comparison with a competing model of external-influence. Our empirical results support the internal-influence model in this sector with additional evidence for generalizability provided through a multisector sample of joint venture formation. In contrast, empirical results on the diffusion of M-form structure are more consistent with the external-influence model.

Keywords: administrative innovations; diffusion models; joint ventures; M-form organizational structures; resource-based theory (search for similar items in EconPapers)
Date: 1994
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:40:y:1994:i:4:p:496-507

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