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    Host-country institutional constraints on firm behaviours across international joint venture life-cycle stages

    Huang, Wenhui (2020) Host-country institutional constraints on firm behaviours across international joint venture life-cycle stages. PhD thesis, Birkbeck, University of London.

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    Abstract

    With the massive growth in the formation of international joint ventures (IJVs) over the past three decades, research on firm behaviours across IJV life-cycle stages has become an important issue in international business study. Although the significance of institutions as a set of constraints on firm behaviours has been recognised, our knowledge of the mechanisms through which host-country institutions constrain firm behaviours at different IJV life-cycle stages have been limited. This thesis contributes to this research field by revealing several new mechanisms through which host-country institutions constrain firm behaviours at different IJV life-cycle stages. At the stage of IJV formation, we have collected data from 431 outward FDI projects conducted by Chinese manufacturing firms between 2006 and 2008 and examined whether host-country institutions constrain the foreign direct investment (FDI) ownership mode choice (OMC) of an IJV through the national cultural dimension of IR. We have found that host-country indulgence enhances the relationships between transaction-cost attributes of an FDI project (a parent firm’s R&D intensity, a parent firm’s host-country experience, and host-country political risk) and the FDI OMC of an IJV and that the direct relationship between host-country indulgence and the FDI OMC of an IJV is insignificant. At the stage of IJV operation, we have collected data from 256396 domestic firms and 68381 foreign-invested firms in Chinese manufacturing industry between 1998 and 2007 and investigated whether host-country institutions constrain intra-industry productivity spill overs from IJVs to domestic firms through state ownership of the host-country IJV partner. We have found that tate ownership of the host-country IJV partner enhances intra-industry productivity spill overs from IJVs to domestic firms, especially to state-owned enterprises (SOEs). At the stage of IJV termination, we have collected data from 16583 manufacturing IJVs in China between 2005 and 2006 and explored whether through two informal mechanisms -rates of wholly foreign-owned enterprises (WFOEs)/successful WFOEs in a host industry and host-regional SOE dominance -and two formal mechanisms -host-regional centrally-planned allocation of economic resources and FDI-restricted industry -host-country institutions constrain the conversion of an IJV into a WFOE (CIW). We have found (1) positive effects of rates of WFOEs/highly profitable WFOEs/high market-share WFOEs in a host industry and (2) a negative effect of host-regional SOE dominance, on the CIW. We have also found no significant impact of host-country institutions on the CIW through the two formal mechanisms. Theoretical, managerial, and policy implications of our findings are also discussed.

    Metadata

    Item Type: Thesis
    Copyright Holders: The copyright of this thesis rests with the author, who asserts his/her right to be known as such according to the Copyright Designs and Patents Act 1988. No dealing with the thesis contrary to the copyright or moral rights of the author is permitted.
    Depositing User: Acquisitions And Metadata
    Date Deposited: 10 Nov 2021 17:05
    Last Modified: 10 Nov 2021 17:05
    URI: https://eprints.bbk.ac.uk/id/eprint/46680

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