Journal
ENTREPRENEURSHIP THEORY AND PRACTICE
Volume 44, Issue 2, Pages 211-232Publisher
SAGE PUBLICATIONS INC
DOI: 10.1177/1042258718797925
Keywords
family firms; entry mode; transaction cost economics; joint venture; wholly owned subsidiary
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We examine the effects of family control on entry mode choice by integrating Transaction Costs Economics with the family business literature. Using a dataset of 951 foreign investments, we investigate the role of family involvement on entry modes. After controlling for endogeneity, we find that if both the investing and the local firm are family firms, forming a joint venture is preferred, while if only the investing firm is a family firm, a wholly owned subsidiary is more likely. Results show that family control has an important impact on entry modes, an hypothesis that has not yet been fully explored.
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