Abstract
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.
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 language | English |
|---|---|
| Pages (from-to) | 965-976 |
| Number of pages | 12 |
| Journal | Journal of World Business |
| Volume | 51 |
| Issue number | 6 |
| Early online date | 28 Sept 2016 |
| DOIs | |
| Publication status | Published - 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/).Keywords
- foreign direct investment
- ownership
- ownership change
- property rights theory
- incomplete contracts
- corruption
- financial markets