Search results

AbstractUsing a sample of US firms engaged in joint venture activity primarily in the 1990s, we test the hypothesis that joint venture activity is motivated by a desire for efficient risk sharing. We find that approximately ninety‐six percent of our sample experiences a risk change in response to joint venture activity. A significant proportion of these experience a reduction in beta. No market price response is evident in conjunction with this reduction. In addition, the average parent firm experiences a significant increase in firm risk, which we attribute to taking on the risky joint venture. This increase in risk is particularly pronounced for firms engaged in international joint ventures and is accompanied by a positive market response. Investment stake, pre‐venture firm profitability, size and private risk increasing characteristics appear to influence the wealth character of the joint venture. We interpret that there may be a positive market premium for international diversification effects and/or for the flexibility that the real option joint venture opportunity provides.

Presents the initial findings of an ongoing study into the motives and uses of the joint venture by British investors in the Czech Republic. Observes that, despite the many opportunities presented of doing business in Eastern Europe, the British have been slow to invest; the UK does not feature in the top seven investors in the Czech Republic. Points out that it is a widely held belief that the joint venture is the most common mode of entry used by Western firms when investing in Central and Eastern Europe. Contends that there is a clear match between the needs of market‐seeking or cost advantage‐seeking Western firms on the one hand and the technological needs of the Eastern Europeans on the other. However, suggests from the study data that UK investors have chosen to own their foreign operations wholly rather than work with local partners. Examines the different modes of entry, the sector and the function of investment used by British firms. Notes the predominance of service activities.

AbstractThe paper presents new evidence on Western investment in China. It offers a comprehensive analysis of official statistics for the period 1979‐86 which is supplemented by questionnaire responses from 79 Western investors. Theories of internalization and joint venture activity are tested using a regression model which examines the interplay of industry‐specific, firm‐specific and source country‐specific determinants of business strategy. The results suggest that Western investors have pursued a coherent rational strategy towards the economic and political uncertainties of the host environment.

In response to recent trends in migration and remittances, many home-country governments have created new agencies that we call diaspora engagement institutions (DEI) intended to address migrant issues. In developing countries, DEI policies often direct migrant money and attention to funding and founding new businesses back home. In this paper, we ask whether and when those DEIs are effective. Grounding our explanation in social exchange and social identity theories, we propose that DEIs are more effective when they promote a stronger sense of home-country belonging and reciprocal giving among migrants. Using evidence from panel data analysis of 35 countries observed from 2001 to 2010, we find partial support for our predictions.

This paper aims to provide an insight into the foundations of the development of the institution of venture capital financing, as well as summarize and conceptualize the experience of more economically developed countries, where the more favorable conditions have been created for the conduct of venture capital business. The authors' summarization of theoretical, methodological, and empirical data has made it possible to formulate the major issues characteristic of the making of the venture capital sector in countries with a transitive economy (Russia, in particular), as well as propose a set of solutions aimed at optimizing the legal and institutional space in the venture capital sector with a view to boosting the innovation activity of businesses. The authors derive the following major inferences: Venture capital financing is a modern institution whose activity is aimed at accumulating and redistributing temporarily available investment resources that are sought after in the sphere of innovation entrepreneurship; Countries whose economy may currently be recognized as transitive are characterized by a set of uniform issues: underdeveloped infrastructure in the national innovation system; lack of sources of venture capital financing; businesses reporting decreased innovation activity levels due to lack of economic incentives; lack of personnel resources; The evidence from the experience of more economically developed countries suggests that to enable the proper making of the institution of venture capital financing in countries with a transitive economy a set of interrelated objectives may need to be undertaken, namely: ensuring legal optimization; boosting investment attractiveness; altering the nature of partnership between the state, business, and science-and-education sector; reducing state participation in economic and research activity. ; peer-reviewed