Ownership control of foreign affiliates: a property rights theory perspective

Nigel Driffield, Tomasz Mickiewicz*, Yama Temouri

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper applies property rights theory to explain changes in foreign affiliates’ ownership. Post-entry ownership change is driven by both firm-level characteristics and by the differences in the institutional environments in host countries. We distinguish between financial market development and the level of corruption as two different institutional dimensions, such that changes along these dimensions impact
upon ownership change in different ways. Furthermore, we argue that changes in ownership are affected by the foreign affiliate’s relatedness with its parent’s sector, as well as by the affiliate’s maturity. We use firm level data across 125 host countries to test our hypotheses.
Original languageEnglish
Pages (from-to)965-976
Number of pages12
JournalJournal of World Business
Issue number6
Early online date28 Sept 2016
Publication statusPublished - 1 Nov 2016

Bibliographical note

© 2016 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).


  • foreign direct investment
  • ownership
  • ownership change
  • property rights theory
  • incomplete contracts
  • corruption
  • financial markets


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