Ownership control of foreign affiliates: a property rights theory perspective

Nigel Driffield; Tomasz Mickiewicz; Yama Temouri

doi:10.1016/j.jwb.2016.08.003

Ownership control of foreign affiliates: a property rights theory perspective

Nigel Driffield
, Tomasz Mickiewicz^*
, Yama Temouri

^*Corresponding author for this work

University of Warwick

Research output: Contribution to journal › Article › peer-review

38 Citations (SciVal)

101 Downloads (Pure)

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.

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	https://doi.org/10.1016/j.jwb.2016.08.003
Publication status	Published - 1 Nov 2016

Bibliographical note

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

Keywords

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

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10.1016/j.jwb.2016.08.003Licence: CC BY-NC-ND 3.0

Ownership control of foreign affiliates
© 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/).
Final published version, 643 KBLicence: CC BY-NC-ND 3.0

Cite this

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title = "Ownership control of foreign affiliates: a property rights theory perspective",

abstract = "This paper applies property rights theory to explain changes in foreign affiliates{\textquoteright} 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{\textquoteright}s relatedness with its parent{\textquoteright}s sector, as well as by the affiliate{\textquoteright}s maturity. We use firm level data across 125 host countries to test our hypotheses.",

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Ownership control of foreign affiliates: a property rights theory perspective

Abstract

Bibliographical note

UN SDGs

Keywords

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