Abstract
We theoretically identify two levels of agency conflicts related to foreign direct investment FDI: within a parent firm and between parents and an affiliated firm. For a sample of 182 firms that announced U.S.-related FDIs in 1995, we examine the effects of agency conflicts on the choice between a wholly owned subsidiary WOS and a joint venture JV, and the relative share ownership of a parent. Firms with higher management ownership, especially the firms that made related FDIs, and firms with higher foreign affiliate monitoring efficiency are more likely to choose a WOS. Differences between U.S. and non-U.S. parents are also examined.
| Original language | English |
|---|---|
| Pages (from-to) | 75-98 |
| Number of pages | 24 |
| Journal | Multinational Business Review |
| Volume | 11 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jun 17 2003 |
ASJC Scopus Subject Areas
- Business and International Management
- General Business,Management and Accounting
Keywords
- Foreign direct investment
- Joint venture
- Shared ownership
- Wholly owned subsidiary
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