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Journal of International Business Studies

, Volume 50, Issue 8, pp 1310–1337 | Cite as

Bringing corporate governance into internalization theory: State ownership and foreign entry strategies

  • Birgitte GrøgaardEmail author
  • Asmund Rygh
  • Gabriel R. G. Benito
Article

Abstract

We use internalization theory to analyze the establishment and entry mode decisions of state-owned (SOE) and privately owned (POE) enterprises. We enrich internalization theory by building on insights from economic theory of corporate governance and taking into account particular characteristics of SOEs such as non-economic motivations, long-term orientation, and different risk preferences. We examine foreign entries over a 10-year period in the Canadian oil and gas industry. This single-country and single-industry context features foreign SOEs and POEs from a wide range of home countries, allowing a focused study of the combined influence of state ownership and home-country factors. Compared to POEs, SOEs tend to prefer acquiring stand-alone assets rather than firms, and to take lower ownership shares. We also find that differences between SOEs and POEs diminish when home countries are characterized by high government quality and market orientation and identify differences between types of SOEs, with partially owned SOEs exhibiting behaviors more similar to POEs than fully owned SOEs. We demonstrate how our enrichment of internalization theory strengthens its predictive and explanatory capacity. Our results also show that SOEs from strong and market-oriented institutional environments are similar to POEs and can be studied using the traditional internalization theory.

Keywords

state ownership internalization theory corporate governance foreign market entry multinational enterprise oil and gas industry 

Résumé

Nous utilisons la théorie de l’internalisation pour analyser les décisions concernant les modes d’établissement et les modes d’entrée des entreprises appartenant à l’État (EAE) et des entreprises appartenant au secteur privé (EAP). Nous enrichissons la théorie de l’internalisation en nous appuyant sur les connaissances de la théorie économique de la gouvernance d’entreprise et en prenant en compte les caractéristiques particulières des EAE telles que les motivations non économiques, l’orientation à long terme et les préférences de risque différentes. Nous examinons les entrées de sociétés étrangères sur une période de dix ans dans l’industrie canadienne du pétrole et du gaz. Ce contexte national et sectoriel unique comprend des EAE et EAP étrangères provenant d’un large nombre de pays d’origine; ce qui permet une étude ciblée de l’influence combinée de la propriété de l’État et des facteurs liés au pays d’origine. Par rapport aux EAP, les EAE ont tendance à préférer l’acquisition d’actifs autonomes plutôt que d’entreprises, et à prendre des parts de propriété moins importantes. Nous constatons également que les différences entre les EAE et EAP diminuent lorsque les pays d’origine se caractérisent par une grande qualité de gouvernement et une orientation du marché, et identifient les différences entre les types d’EAE; les EAE partiellement détenues affichant des comportements plus similaires aux EAP que les EAE entièrement détenues. Nous montrons comment notre enrichissement de la théorie de l’internalisation renforce ses capacités prédictives et explicatives. Nos résultats montrent également que les EAE provenant d’environnements institutionnels forts et axés sur le marché sont similaires aux EAP et peuvent être étudiées à l’aide de la théorie d’internalisation traditionnelle.

Resumen

Usamos la teoría de internalización para analizar el establecimiento y las decisiones de modo de entrante de empresas de propiedad estatal y de empresas privadas. Enriquecimos la teoría de internacionalización a partir de los conocimientos de la teoría económica del gobierno corporativo y tomando en cuenta las características particulares de las empresas de propiedad estatal como las motivaciones no económicas, la orientación a largo plaza, y diferentes preferencias de riesgo. Examinamos entradas al extranjero durante un periodo de 10 años en la industria canadiense de petróleo y gas. Este contexto de un solo país y una sola industria destaca empresas de propiedad del estado y empresas privadas de una amplia gama de países de origen, permitiendo un estudio enfocado en la influencia combinada de propiedad estatal y factores de país de origen. En comparación con las empresas de propiedad privada, las empresas de propiedad del estado tienen a preferir activos independientes en lugar de empresas, y toman proporciones más bajas de propiedad. También encontramos que las diferencias entre las empresas de propiedad estatal y las empresas de propiedad privada disminuyen cuando los países de origen se caracterizan por alta calidad gubernamental y orientación de mercado, e identifican diferencias entre los tipos de empresas de propiedad estatal, las empresas parcialmente de propiedad estatal exhiben comportamientos más similares a las empresas de propiedad privada que las empresas de propiedad total estatal. Demostramos cómo una nuestra teoría de internalización enriquecida fortalece su capacidad predictiva y explicativa. Nuestros resultados muestran también que las empresas de propiedad estatal de entornos institucionales fuertes y orientados al mercado son similares a las empresas privadas y pueden ser estudiadas usando la teoría tradicional de internalización.

Resumo

Usamos a teoria da internalização para analisar as decisões de estabelecimento e modo de entrada de empresas estatais (SOE) e privadas (POE). Nós enriquecemos a teoria da internalização ao estabelecer insights da teoria econômica da governança corporativa levando em consideração características específicas de SOEs, como motivações não econômicas, orientação de longo prazo e diferentes preferências de risco. Examinamos entradas estrangeiras ao longo de um período de dez anos na indústria canadense de petróleo e gás. Esse contexto de um único país e de uma única indústria apresenta SOEs e POEs estrangeiros de uma vasta gama de países de origem, permitindo um estudo concentrado da influência combinada da propriedade estatal e fatores do país de origem. Comparadas a POEs, SOEs tendem a preferir a aquisição de ativos independentes ao invés de empresas, e a adquirir menores participações acionárias. Também descobrimos que as diferenças entre SOEs e POEs diminuem quando os países de origem são caracterizados por alta qualidade do governo e orientação a mercado e identificamos diferenças entre tipos de SOEs, com SOEs parcialmente controladas exibindo comportamentos mais semelhantes a POEs do que SOEs totalmente controladas. Demonstramos como nosso enriquecimento da teoria da internalização fortalece sua capacidade preditiva e explicativa. Nossos resultados também mostram que SOEs de ambientes institucionais fortes e orientadas ao mercado são semelhantes a POEs e podem ser estudadas usando a teoria tradicional de internalização.

摘要

我们使用内部化理论分析了国有(SOE)和私有(POE)企业的建立和进入模式的决策。我们通过依托公司治理经济理论的洞见 ,并考虑到国有企业的特殊特征 ,如非经济动机 ,长远导向和不同的风险偏好 ,从而丰富了内部化理论。我们研究了十年间外国对加拿大的石油和天然气行业的打入。这种单一国家和单一行业情境包括了来自各个国家的外国国有企业和私有企业 ,允许我们对国家所有权和本国因素的综合影响进行重点研究。与私有企业相比 ,国有企业倾向于收购独立资产而不是企业 ,并拥有较低的所有权份额。我们还发现 ,当母国具有较高的政府质量和市场导向 ,并确定不同类型国有企业之间的差异时 ,国有企业和私有企业之间的差异减少 ,拥有部分股权的国有企业表现出的行为与全资的国有企业较为相似。我们展示了我们对内部化理论的丰富如何增强了其预测力和解释力。我们的研究结果还表明 ,来自强大的和市场为导向的制度环境的国有企业与私有企业相似 ,可以使用传统的内部化理论来进行研究。

Notes

ACKNOWLEDGEMENTS

We thank three anonymous reviewers and the Special Issue Editors Christian G. Asmussen, Tailan Chi, Sumit Kundu, and Rajneesh Narula for their guidance and many constructive comments, which were instrumental to the development of this paper. We are also grateful for the feedback received from participants at the Paper Development Workshop for this Special Issue held in Minneapolis in June 2018, particularly from our discussant Ajai Gaur. Thanks also to Alvaro Cuervo-Cazurra, Sjoerd Beugelsdijk, Alessandra Luzzi and José Pla-Barber for helpful comments on this research. Previous versions of this article were presented at the 2018 EIBA Annual Conference (Poznan), 2015 AIB Annual Conference (Bangalore), 2015 Reading-UNCTAD Conference (Reading), 2014 EIBA Annual Conference (Uppsala), and in seminars at Alliance Manchester Business School (University of Manchester), BI Norwegian Business School, Haskayne Business School (University of Calgary), Henley Business School (University of Reading), and Turku School of Economics (University of Turku). We are grateful for the many comments and suggestions provided by colleagues attending the presentations. The usual disclaimer applies. We are grateful for the financial support from BI Norwegian Business School, Haskayne School of Business (University of Calgary), and the MAROFF project (Norwegian Research Council). We have also benefited from the support of the Centre for Corporate Governance Research at BI Norwegian Business School.

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Copyright information

© Academy of International Business 2019

Authors and Affiliations

  • Birgitte Grøgaard
    • 1
    Email author
  • Asmund Rygh
    • 2
  • Gabriel R. G. Benito
    • 1
  1. 1.BI Norwegian Business SchoolOsloNorway
  2. 2.Alliance Manchester Business SchoolThe University of ManchesterManchesterUK

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