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The multinational corporation's degree of control over foreign subsidiaries : an empirical test of a transaction cost explanation
Hubert Gatignon,Erin Anderson +1 more
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In this paper, the authors examine empirically the theory's predictions in the context of the multinational corporation (MNC), which attempts to control the operations of foreign "subsidiaries" (business units) that it owns in whole or in part.Abstract:
Should a business function be vertically integrated? Increasingly, economists have acknowledged that this is the wrong question. The right question is to what degree a function should be integrated, whereby integration is a continuum anchored by the options of market and hierarchy (Williamson, 1985). Movement along the continuum from market contracting to unified governance is accompanied by an increased degree to which resources are placed at hazard. The firm is compensated for this by an increased level of control that it presumably will use "correctly" in order to generate superior profit outcomes. The central questions of transaction cost analysis are twofold: When will the firm need more control (that is, when do lower-control outcomes become less desirable), and when will the benefits of increased control more than offset the costs of resource commitment and risk? Oliver Williamson (1985) offers a theory to answer these questions. In this paper we examine empirically the theory's predictions in the context of the multinational corporation (MNC), which attempts to control the operations of foreign "subsidiaries" (business units) that it owns in whole or in part. Weread more
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The Effect of National Culture on the Choice of Entry Mode
Bruce Kogut,Harbir Singh +1 more
TL;DR: In this paper, the authors investigated the influence of national culture on the choice of entry modes in the United States market by analysing data on 228 entries into the market by acquisition, wholly owned greenfield and joint venture.
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The New Institutional Economics: Taking Stock, Looking Ahead
TL;DR: In this paper, the authors examine the progressive development of the new institutional economics over the past quarter century, distinguishing four levels of social analysis, with special emphasis on the institutional environment and the institutions of governance.
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Transaction Cost Analysis: Past, Present, and Future Applications
Aric Rindfleisch,Jan B. Heide +1 more
TL;DR: In this article, transaction cost analysis (TCA) has received considerable attention in the marketing literature over the past decade, and marketing scholars have made important contributions in extending and refining it.
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Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences
TL;DR: A critical review of the cultural distance construct, outlining its hidden assumptions and challenging its theoretical and methodological properties, is presented in this article, where concrete steps aimed at enhancing rigor are delineated.
Journal ArticleDOI
Performance Outcomes of Purchasing Arrangements in Industrial Buyer-Vendor Relationships
TL;DR: In this article, a conceptual framework that organizes the purchasing arrangements for repetitively used industrial supplies assume many different forms, and a transaction cost analysis is used to organize these forms.
References
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The Economic Institutions of Capitalism
TL;DR: The Economic Institutions of Capitalism as mentioned in this paper is a seminal work in the field of economic institutions of capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.
Journal ArticleDOI
Markets and Hierarchies: Analysis and Antitrust Implications.
Journal ArticleDOI
Transaction-Cost Economics: The Governance of Contractual Relations
TL;DR: For instance, the authors argues that if transaction costs are negligible, the organization of economic activity is irrelevant, since any advantages one mode of organization appears to hold over another will simply be eliminated by costless contracting.
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