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Adverse Selection and the Choice between Joint-Ventures and Acquisitions: Evidence from Spanish Firms

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  • Cristina López-Duarte
  • Esteban García-Canal

Abstract

We analyze the determinants of the choice between green field joint ventures, full acquisitions, and partial acquisitions in the international expansion of a firm through foreign direct investments. Our results show that this choice is conditioned by transaction-cost factors (particularly the cultural distance between the home and host countries), as well as by the previous experience and internationalization path of the foreign investor, as suggested by the knowledgebased theories of the firm.

Suggested Citation

  • Cristina López-Duarte & Esteban García-Canal, 2002. "Adverse Selection and the Choice between Joint-Ventures and Acquisitions: Evidence from Spanish Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(2), pages 304-324, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200206)158:2_304:asatcb_2.0.tx_2-n
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    References listed on IDEAS

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    1. Richard A. Bettis & C. K. Prahalad, 1995. "The dominant logic: Retrospective and extension," Strategic Management Journal, Wiley Blackwell, vol. 16(1), pages 5-14.
    2. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
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    Cited by:

    1. Cristina López-Duarte & Marta Vidal-Suárez, 2008. "Foreign direct investment through partial acquisitions: hostage effect or conflicts enhancement," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(3), pages 287-308, August.

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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