Ownership-Based Entry Mode Strategies and International Performance

• DOI: 10.1057/palgrave.jibs.8490200
• Publication Date: 2007-01-23T09:11:28Z
• Authors: C. Patrick Woodcock; Paul W. Beamish; Shige Makino
• Keywords: International business; Contingency; Contingency theory; New Ventures; Mode (computer interface); Sample (material); Resource-Based View; International joint venture; Empirical evidence

This study examines the relationship between ownership entry modes and performance. The ownership entry modes examined are the wholly owned modes of acquisition and new venture entry, and the non-wholly owned mode of joint venture entry. A theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors. This model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands. The theoretical model, although developed using the eclectic theoretical approach, is based largely on concepts and relationships previously delineated in contingency theory. Our hypotheses suggest that new ventures should outperform joint ventures, and joint ventures should outperform acquisitions. An empirical test using a sample of 321 Japanese firms entering the North American market provides supporting evidence.