Transactional and Institutional Alignment of Entry Modes in Transition Economies: A Survival Analysis of Joint Ventures and Wholly-Owned Subsidiaries in Vietnam

authors

  • Meschi Pierre-Xavier
  • Wassmer Ulrich
  • Phan Thanh Tú

keywords

  • Transaction costs
  • Institutional environment
  • Transition economies
  • Survival
  • Entry mode
  • Event history method

document type

ART

abstract

How do partially aligned entry modes predicted through theoretically pluralistic frameworks perform in terms of longevity? We build on transaction costs and neo-institutional economics and use event history method and Vietnamese data on 3,835 joint ventures and wholly owned subsidiaries established by foreign firms from 1987 to 2008 to answer this question. We find that survival rates for entry modes that are partially aligned to transactional and institutional factors differ for JV- and WOS-based entries. We provide new evidence for the predictive power of the transactional and institutional approach for entry mode choice, performance, and survival in transition economies.

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