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Why do multinational firms seek out joint ventures?
Author(s) -
Blomström Magnus,
Zejan Mario
Publication year - 1991
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.4010030105
Subject(s) - multinational corporation , business , joint (building) , product (mathematics) , production (economics) , industrial organization , international trade , marketing , microeconomics , economics , finance , architectural engineering , geometry , mathematics , engineering
This paper uses a model of dichotomous choice to distinguish the characteristics of Swedish multinational firms that seek out joint ventures from those that do not. The main findings suggest that firms with brief experience of foreign production and highly diversified product lines are the most likely to choose minority ownership. There was also some support for the hypothesis that multinationals choose minority ownership for affiliates producing different (two‐digit) output than their parents.