Journal Article

Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes

Chi, Tailan, McGuire, Donald J.

1996

Overview

This paper employs a simple stochastic model to investigate how transaction cost and strategic option considerations interact to influence a firm's evaluation of collaborative venturing as a market entry mode. After demonstrating how uncertainty about the market and about the potential partner can add to the value of a collaborative venture, the paper explicates a condition under which the option to acquire or sell out generates a positive economic value for both of the partners. The interaction of transaction cost and strategic option considerations is then examined, and a number of testable hypotheses are proposed based on the theoretical analyses of the paper.

• Publisher: Academy of International Business and Richard Ivey School of Business, University of Western Ontario,Palgrave Macmillan UK,Palgrave Macmillan
• Subject: Business and Management / Business Strategy/Leadership / Collaboration / Contract negotiations / Costs / Economic theory / Economic uncertainty / Economic value / Equity / Equity stake / Hypotheses / Information asymmetry / International Business / Internationale Unternehmenskooperation / Joint ventures / Learning / Management / Market entry / Markets / Markteintritt / Multinational corporations / Options contracts / Organization / Program evaluation / State of nature / Stochastic models / Strategic planning / Studies / Theorie / Transaction costs / Transaktionskosten / Uncertainty / Value / Ventures