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

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  • Tailan Chi

    (University of Wisconsin-Milwaukee)

  • Donald J McGuire

    (University of Wisconsin-Milwaukee)

Abstract

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.© 1996 JIBS. Journal of International Business Studies (1996) 27, 285–307

Suggested Citation

  • Tailan Chi & Donald J McGuire, 1996. "Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(2), pages 285-307, June.
    • Handle: RePEc:pal:jintbs:v:27:y:1996:i:2:p:285-307
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