Market Entry Mode Analysis Of Joint Ventures And Wholly - Owned

With world's competition beginning fiercer, recourses will rest the future success or failure of more and more companies. Consequently, two different foreign entry models start to be popular, they are "Joint Venture" (JV) and "Wholly Owned Subsidiary" (WOS). This paper develops a theoretical framework for analyzing the resource allocation pattern based on two famous theories: the transaction cost economics and resource-based strategy. A major part of this paper is devoted to developing and diagnosing variables including uncertainty, asset specificity, resource imitability, mobility, which will influence the decision of choosing these two different patterns. Together this paper puts up 4 hypotheses to show the relationship between these 4 variables and the pattern choice. The decision criterion and empirical analysis is discussed in the last part by analyzing 662 subsidiaries of Japan's 19 electric (equipment) companies in East Asian region.