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Modal Choice in a World of Alliances: Analyzing Organizational Forms in the International Hotel Sector

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  • Farok J Contractor

    (Rutgers University)

  • Sumit K Kundu

    (Saint Louis University)

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    Abstract

    In the new management landscape, where interfirm collaborations are common, international companies today have fully owned operations and equity joint ventures, as well as non-equity alliances, which in the service sector include franchising and management service agreements. What determines the optimum choice of organizational mode? The new syncretic theory developed in this paper combines concepts from transaction costs theory, agency theory, corporate knowledge and organizational capability theories to answer this question. The paper then tests these concepts to explain the incidence of these modes in the international hotel business, using canonical discriminant analysis, as well as logistical regression using a generalized LOGIT model. The choice of “entry mode” is shown to be determined by both country or environmental variables, as well as firm-specific variables.© 1998 JIBS. Journal of International Business Studies (1998) 29, 325–356

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 29 (1998)
    Issue (Month): 2 (June)
    Pages: 325-356

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    Handle: RePEc:pal:jintbs:v:29:y:1998:i:2:p:325-356

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    Cited by:
    1. Contractor, F. J. & Lorange, P., 2002. "The growth of alliances in the knowledge-based economy," International Business Review, Elsevier, vol. 11(4), pages 485-502, August.
    2. Gómez Selemeneva, D. & Ortigueira, Luis C., 2007. "La expansión internacional como Estrategia Corporativa: Estudio de Caso de la Industria Hotelera en Iberoamérica
      [International Expansion as Corporate Strategy: A Case Study of Hotel Industry in
      ," MPRA Paper 11240, University Library of Munich, Germany, revised 06 Feb 2008.
    3. Li, Peng-Yu & Meyer, Klaus E., 2009. "Contextualizing experience effects in international business: A study of ownership strategies," Journal of World Business, Elsevier, vol. 44(4), pages 370-382, October.
    4. Canabal, Anne & White III, George O., 2008. "Entry mode research: Past and future," International Business Review, Elsevier, vol. 17(3), pages 267-284, June.
    5. Sullivan, Ursula Y. & Coughlan, Anne T., 2004. "The Detail of Drugs: Horizontal Distribution Alliances in the International Pharmaceutical Industry," Working Papers 04-0114, University of Illinois at Urbana-Champaign, College of Business.
    6. Gomez Selemeneva, D., 2008. "Cooperación en el Caso de la Gestión Hotelera en Cuba: Modelo para su Monitoreo Considerando el Criterio de los Expertos Implicados
      [Coopetition in the Case of Hotel Management in Cuba: Model of
      ," MPRA Paper 11175, University Library of Munich, Germany.
    7. Jópez Milla Julián & Driha Oana Madalina, 2009. "Spanish Hotel International Expansion: Evolution And Tendency. The Role Of Eastern Europe," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 181-187, May.
    8. Jie Zhang & Camilla Jensen, 2005. "Comparative Advantage in Tourism - A Supply-Side Analysis of Tourism Flows," ERSA conference papers ersa05p183, European Regional Science Association.
    9. Gomez-Selemeneva, D., 2009. "Factores Claves para la Sostenibilidad de las Alianzas Inter-organizativas: Un caso de Estrategias de Cooperación
      [Key Factors for Sustainability of Inter-organizational Alliances: A Case for Coop
      ," MPRA Paper 31274, University Library of Munich, Germany.
    10. Mayrhofer, Ulrike, 2004. "The influence of national origin and uncertainty on the choice between cooperation and merger-acquisition: an analysis of French and German firms," International Business Review, Elsevier, vol. 13(1), pages 83-99, February.
    11. Dahlstrom, Robert & Haugland, Sven A. & Nygaard, Arne & Rokkan, Aksel I., 2009. "Governance structures in the hotel industry," Journal of Business Research, Elsevier, vol. 62(8), pages 841-847, August.
    12. Stiegert, Kyle W. & Ardalan, Archie Amir & Marsh, Thomas L., 2006. "Foreign-Market Entry Strategies in the European Union," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(03), November.
    13. Yeheskel, Orly & Newburry, William & Zeira, Yoram, 2004. "Significant differences in the pre- and post-incorporation stages of equity international joint ventures (IJVs) and international acquisitions (IAs), and their impacts on effectiveness," International Business Review, Elsevier, vol. 13(5), pages 613-636, October.
    14. Quer, Diego & Claver, Enrique & Andreu, Rosario, 2007. "Foreign market entry mode in the hotel industry: The impact of country- and firm-specific factors," International Business Review, Elsevier, vol. 16(3), pages 362-376, June.
    15. Yeheskel, Orly & Zeira, Yoram & Shenkar, Oded & Newburry, William, 2001. "Parent company dissimilarity and equity international joint venture effectiveness," Journal of International Management, Elsevier, vol. 7(2), pages 81-104.
    16. Spyros Arvanitis & Tobias Stucki & Heinz Hollenstein, 2013. "Determinants of Internationalisation – Do they Differ among Sectors and Business Functions? Evidence from Firm-level Data," KOF Working papers 13-348, KOF Swiss Economic Institute, ETH Zurich.
    17. Dunning, John H. & Pak, Yong Suhk & Beldona, Sam, 2007. "Foreign ownership strategies of UK and US international franchisors: An exploratory application of Dunning's envelope paradigm," International Business Review, Elsevier, vol. 16(5), pages 531-548, October.
    18. Parente, Ronaldo & Choi, Byeongyong Paul & Slangen, Arjen H.L. & Ketkar, Sonia, 2010. "Distribution system choice in a service industry: An analysis of international insurance firms operating in the United States," Journal of International Management, Elsevier, vol. 16(3), pages 275-287, September.
    19. Globerman, Steven & Nielsen, Bo Bernhard, 2007. "Equity versus non-equity international strategic alliances involving Danish firms: An empirical investigation of the relative importance of partner and host country determinants," Journal of International Management, Elsevier, vol. 13(4), pages 449-471, December.
    20. Mário Ogasavara & Yasuo Hoshino, 2009. "Implications of firm experiential knowledge and sequential FDI on performance of Japanese subsidiaries in Brazil," Review of Quantitative Finance and Accounting, Springer, vol. 33(1), pages 37-58, July.
    21. Mutinelli, Marco & Piscitello, Lucia, 2001. "Foreign direct investment in the banking sector: the case of Italian banks in the '90s," International Business Review, Elsevier, vol. 10(6), pages 661-685, December.
    22. Morschett, Dirk & Schramm-Klein, Hanna & Swoboda, Bernhard, 2010. "Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice?," Journal of International Management, Elsevier, vol. 16(1), pages 60-77, March.
    23. P. Everaert & G. Sarens & J. Rommel, 2006. "Outsourcing of Accounting Tasks in SMEs: An extended TCE Model," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/409, Ghent University, Faculty of Economics and Business Administration.
    24. Vachani, Sushil, 2005. "Problems of foreign subsidiaries of SMEs compared with large companies," International Business Review, Elsevier, vol. 14(4), pages 415-439, August.
    25. Francine Lafontaine & Joanne Oxley, 2001. "International Franchising: Evidence from US and Canadian Franchisors in Mexico," NBER Working Papers 8179, National Bureau of Economic Research, Inc.

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