This empirical study focuses on Japanese manufacturing companies that established new entities in the manufacturing sector in the European Union, with special attention to the choice between taking full ownership or sharing with another firm. This paper aims at providing further empirical evidence on the influence of some key variables in explaining it. The results provide initial support for using a model which includes institutional and cultural variables, as well as transaction cost variables to predict firms’ choices between joint venture and wholly owned subsidiaries in international expansions. The findings also suggest that some host country’s influence may act as a modifying or moderating variable in the diversification mode choice.
Kais Ben Youssef is Doctoral Student in Quantitative Finance and Management at the Institute of Policy and Planning Sciences, University of Tsukuba. Writings incluce “The Choice between Joint Ventures and Wholly Owned Subsidiaries: the Case of Japanese Direct Investment in Europe”, co-authored with Yasuo Hoshino, in Japanese Journal of Administrative Science, Vol. 17, No. 1, pp. 31-46.