The Effects of Agency Problems on the Stability of the International Joint Venture

H. Young Baek, Soon Hong Min, Sungmin Ryu

Research output: Contribution to journalReview article

2 Citations (Scopus)

Abstract

We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and identified agency conflicts among partners as well as between parents and IJV affi liates. We empirically test the stability of IJVs with such determinants as the existence of monitoring principal, the history of repeated exchanges between partners, the efficiency of mutual monitoring by partners, the effi ciency of affiliate monitoring by parent firms, and the degree of international experience of the partners. The test results show that the existence of monitoring principal and the degree of international experience prove to be significant factors for IJV stability.

Original languageEnglish
Pages (from-to)53-70
Number of pages18
JournalMultinational Business Review
Volume14
Issue number3
DOIs
Publication statusPublished - 2006 Nov 19

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Monitoring
Agency problems
International joint ventures
International experience
Team production
Factors
Agency conflict
Production theory

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)

Cite this

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title = "The Effects of Agency Problems on the Stability of the International Joint Venture",
abstract = "We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and identified agency conflicts among partners as well as between parents and IJV affi liates. We empirically test the stability of IJVs with such determinants as the existence of monitoring principal, the history of repeated exchanges between partners, the efficiency of mutual monitoring by partners, the effi ciency of affiliate monitoring by parent firms, and the degree of international experience of the partners. The test results show that the existence of monitoring principal and the degree of international experience prove to be significant factors for IJV stability.",
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The Effects of Agency Problems on the Stability of the International Joint Venture. / Young Baek, H.; Min, Soon Hong; Ryu, Sungmin.

In: Multinational Business Review, Vol. 14, No. 3, 19.11.2006, p. 53-70.

Research output: Contribution to journalReview article

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N2 - We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and identified agency conflicts among partners as well as between parents and IJV affi liates. We empirically test the stability of IJVs with such determinants as the existence of monitoring principal, the history of repeated exchanges between partners, the efficiency of mutual monitoring by partners, the effi ciency of affiliate monitoring by parent firms, and the degree of international experience of the partners. The test results show that the existence of monitoring principal and the degree of international experience prove to be significant factors for IJV stability.

AB - We introduce agency and team production theories to explain the international joint venture (IJV) phenomenon. We regard IJV partners as participants in a team production and identified agency conflicts among partners as well as between parents and IJV affi liates. We empirically test the stability of IJVs with such determinants as the existence of monitoring principal, the history of repeated exchanges between partners, the efficiency of mutual monitoring by partners, the effi ciency of affiliate monitoring by parent firms, and the degree of international experience of the partners. The test results show that the existence of monitoring principal and the degree of international experience prove to be significant factors for IJV stability.

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