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Executive preferences for governance modes and exchange partners: An information economics perspective
Author(s) -
Reuer Jeffrey J.,
Tong Tony W.,
Tyler Beverly B.,
Ariño Africa
Publication year - 2013
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2064
Subject(s) - corporate governance , interdependence , adverse selection , transaction cost , information asymmetry , perspective (graphical) , business , information exchange , selection (genetic algorithm) , database transaction , industrial organization , executive compensation , information sharing , information economics , marketing , microeconomics , economics , finance , computer science , political science , telecommunications , artificial intelligence , world wide web , law , programming language
This study investigates how executives address information asymmetry and adverse selection surrounding international joint ventures ( IJVs ) and acquisitions. We argue that executives can address such exchange hazards not only through their governance decisions, as prior research indicates, but also through their selection of exchange partners. Our experimental design complements prior research on firms' governance choices in three ways: (1) by incorporating multiple potential exchange partners rather than taking a single partner as given for a realized transaction; (2) by accommodating multiple potential entry modes to address interdependencies across governance structures; and (3) by providing direct evidence on executives' assessments of IJVs and acquisitions. We join together organizational governance research and decision‐making research on IJV partner selection, two literatures that have largely developed separately. Copyright © 2013 John Wiley & Sons, Ltd.