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Transaction cost determinants and ownership-based entry mode choice: a meta-analytical review

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  • Hongxin Zhao

    (Boeing Institute of International Business, Saint Louis University, St Louis, MO, USA)

  • Yadong Luo

    (Department of Management, University of Miami, Coral Gables, FL, USA)

  • Taewon Suh

    (Department of Marketing, McCoy College of Business Administration, Texas State University-San Marcos, San Marcos, TX, USA)

Abstract

Entry mode choice is a critical ingredient of international entry strategies, and has been voluminously examined in the field. The findings, however, are very mixed, especially with respect to transaction-cost-related factors in determining the ownership-based entry mode choice. This study conducted a meta-analysis to quantitatively summarize the literature and empirically generalize more conclusive findings. Based on the 106 effect sizes of 38 empirical studies, the meta-analysis shows that the findings of the existing studies are moderated to varying degrees by both study-setting factors and statistical artifacts, although the combined overall effects of transaction cost-based determinants are consistent with the predictions of transaction cost economics. We extensively discuss the implications of meta-analytical results, especially moderating effects of location, country of origin, industry type, and statistical artifacts, highlight the measurement adequacy, equivalence, and multidimensionality of transaction cost determinants, and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice. Journal of International Business Studies (2004) 35, 524–544. doi:10.1057/palgrave.jibs.8400106

Suggested Citation

  • Hongxin Zhao & Yadong Luo & Taewon Suh, 2004. "Transaction cost determinants and ownership-based entry mode choice: a meta-analytical review," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(6), pages 524-544, November.
  • Handle: RePEc:pal:jintbs:v:35:y:2004:i:6:p:524-544
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