We examine the effects of family control on entry mode choice by integrating Transaction Costs Economics with the family business literature. Using a data set of 951 foreign investments, we investigate the role of family involvement on entry modes. After controlling for endogeneity, we find that if both the investing and the local firm are family firms, forming a joint venture is preferred, while if only the investing firm is a family firm, a wholly owned subsidiary is more likely. Results show that family control has an important impact on entry modes, an hypothesis that has not yet been fully explored.

Family Firms and the Choice Between Wholly Owned Subsidiaries and Joint Ventures: A Transaction Costs Perspective / Sestu, Maria Cristina; Majocchi, Antonio. - In: ENTREPRENEURSHIP THEORY AND PRACTICE. - ISSN 1042-2587. - 22:4(2020), pp. 211-232. [10.1177/1042258718797925]

Family Firms and the Choice Between Wholly Owned Subsidiaries and Joint Ventures: A Transaction Costs Perspective

Majocchi, Antonio
2020

Abstract

We examine the effects of family control on entry mode choice by integrating Transaction Costs Economics with the family business literature. Using a data set of 951 foreign investments, we investigate the role of family involvement on entry modes. After controlling for endogeneity, we find that if both the investing and the local firm are family firms, forming a joint venture is preferred, while if only the investing firm is a family firm, a wholly owned subsidiary is more likely. Results show that family control has an important impact on entry modes, an hypothesis that has not yet been fully explored.
Family firms, entry mode, transaction cost economics, joint venture, wholly owned subsidiary
Family Firms and the Choice Between Wholly Owned Subsidiaries and Joint Ventures: A Transaction Costs Perspective / Sestu, Maria Cristina; Majocchi, Antonio. - In: ENTREPRENEURSHIP THEORY AND PRACTICE. - ISSN 1042-2587. - 22:4(2020), pp. 211-232. [10.1177/1042258718797925]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/196537
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