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International Expansion Through Sequential Investment: The Effects Of National Culture On Buyouts And Dissolutions In Biotechnology Partnerships

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  • TIMOTHY B. FOLTA

    (University of Kentucky)

  • WALTER J. FERRIER

    (University of Kentucky)

Abstract

This study examines the role of national culture on an issue which is central to competitive strategy: whether to maintain flexibility or commit to a strategic direction. We consider that equity investments in foreign partners may be initiated as the first step in a sequential acquisition process. Applying a competing hazard model to a sample of 168 joint ventures and minority equity collaborations in the biotechnology industry, we find that cultural characteristics have some bearing on a firm's willingness to commit through partner acquisition or partnership dissolution, and its preference for flexibility embodied in maintaining an equity collaboration.

Suggested Citation

  • Timothy B. Folta & Walter J. Ferrier, 1997. "International Expansion Through Sequential Investment: The Effects Of National Culture On Buyouts And Dissolutions In Biotechnology Partnerships," Game Theory and Information 9701001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:9701001
    Note: Type of Document - Binary file formatted for Word for Windows95; prepared on IBM compat. PC; to print on HP LaserJet; pages: 29. Manuscript submitted to the Journal of International Business Studies
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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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