Search results for "Transaction cost"

The role of Private Equity-firms in the formation of strategic alliances

2014

This research analyses the role of Private Equity firms in the formation of strategic alliances within the field of the French Private Equity market. We start to provide evidence of its importance from new survey information, before offering an explanation of the organizational phenomenon. The study addresses the questions of how and why Private Equity firms act as relational intermediaries to help their portfolio companies form alliances. Both questions are investigated in the light of the Private Equity firms’ contribution to the value creation process that comes with alliance formation. Answers are provided by means of three jointly used theoretical frameworks: (1) mainstream theories (t…

The role of Private Equity-firms in the formation of strategic alliances

2014

This research analyses the role of Private Equity firms in the formation of strategic alliances within the field of the French Private Equity market. We start to provide evidence of its importance from new survey information, before offering an explanation of the organizational phenomenon. The study addresses the questions of how and why Private Equity firms act as relational intermediaries to help their portfolio companies form alliances. Both questions are investigated in the light of the Private Equity firms’ contribution to the value creation process that comes with alliance formation. Answers are provided by means of three jointly used theoretical frameworks: (1) mainstream theories (t…

Internal vs. external R&D teams: Evidences from the Italian wine industry

2021

R&D teams' internationalization attracts interests from different research-streams. However, the decision on what type of R&D structure is more convenient to invest in may differ, based on several factors, such as risk-taking propensity and internal resource availability. With an aim to enrich the extant literature and to provide practical insights for managers working in the wine industry, this case study explores the determinants of an Italian family-owned winery that attempts to keep a balance between its internal and external R&D teams' decision, using an integrated theoretical framework based on the transaction costs and the resource-based view theory. The optimal R&D s…

2019

Pre-industrial money supply typically consisted of multiple, often foreign currencies. Standard economic theory implies that this entails welfare loss due to transaction costs imposed by currency exchange. Through a study of novel data on Finnish nineteenth-century parish-level currency conditions, we show that individual currencies had principal areas of circulation, with extensive co-circulation restricted to the boundary regions in between. We show that trade networks, defined here through the regional co-movement of grain prices, proved crucial in determining the currency used. Market institutions and standard price mechanisms had an apparent role in the spread of different currencies a…

How risk influences the choice of governance mode in biopharmaceutical inter-firm relationships

2013

Abstract This paper proposes a new theoretical framework for assessing the influence of risk in shaping the governance form in biopharmaceutical inter-firm relationships. In particular, we propose a multidimensional operationalization of relational and performance risk and, by following Transaction Cost Economics (TCE) and Real Options (RO) theory constructs, we hypothesize a relation between the aforementioned risk components and the choice of governance form. Specifically, following TCE reasoning, we hypothesize that a high level of relational risk leads towards more hierarchical governance forms, while, following RO theory, we hypothesize that a high level of performance risk leads towar…

Identifying patterns in channel usage across the search, purchase and post-sales stages of shopping

2015

Different motivations explain channel choice for search, purchase and post-sales.Channel choice is affected by the product category: search/purchase goods.Product involvement is the most relevant variable explaining multichannel behavior.Cross-channel synergies as consumers use both channels at each shopping stage.Meaningful segments based on the choice of channel are identified and characterized. Consumers today are using various channels to complete their purchase process. As shoppers pursue different goals at each stage of the process, channel choice may be explained by different drivers for search, purchase and post-sales activities. Our research framework is based on an extension of th…

Strategic Variables that Influence Entry Mode Choice in Service Firms

2007

This work investigates how a firm's international strategy affects choice of entry mode in the service sector. The inherent complexity associated with studying a heterogeneous sector such as services requires researchers to investigate variables that go beyond those drawn from traditional empirical work on the manufacturing sector. The adoption of a broader theoretical perspective and the introduction of these new variables may well provide further evidence of the determinants of service firms’ entry mode choices. On the basis of 174 entry decisions of service firms, this study's results support the necessity of including additional strategic variables that specifically address this complex…

The internalisation of foreign distribution and production activities

2001

Abstract This paper, using a logit model applied to a sample of 323 Spanish companies with international activities, analyses the key factors in the creation of sales and production subsidiaries. A high degree of fit between the results and the established hypotheses can be observed. Many interesting findings related to the main streams of entry mode research (Transaction Cost Theory and the Uppsala Model) have been supported. The intangibility and tacit nature of the products/processes involved in the foreign venture have been directly associated to wholly owned sales and production subsidiaries. Moreover, modes of entry used by Spanish firms are adapted as an incremental, experiential lea…

When are international managers a cost effective solution? The rationale of transaction cost economics applied to staffing decisions in MNCs

2005

Abstract A common claim in the literature of expatriation is the one referring to the high costs of expatriation. In this paper, on the basis of transaction cost economics (TCE), we show how limited this approach is. In particular, we consider a set of costs that, although ignored in traditional expatriation literature, must be accounted for when a MNC is deciding on whether to recruit expatriates or local managers in its subsidiaries. These costs include selection, training, and performance evaluation costs. We also formulate a series of hypotheses around the situations in which the total costs of recruiting expatriates are lower than those generated by local managers. We then test these h…

The choice of master international franchising – A modified transaction cost model

2022

Abstract This study develops and tests a novel transaction cost model of master international franchising. Based on data from international franchise firms headquartered in six countries, we show that master international franchising is the franchisor’s preferred governance mode under the following conditions: large bilateral franchisor’s and franchisees’ transaction-specific investments, high institutional uncertainty and high behavioral uncertainty. Our model extends the literature by presenting a modified transaction cost model of master international franchising that investigates the bonding effect of bilateral transaction-specific investments and environmental uncertainty as determinan…