Ownership Investments and International Technology Transfer
A partner firm with a majority of the equity shares in an international strategic alliance usually has more rights and powers to appoint its members to the board of directors and more rights to appoint senior managers within the joint venture. A firm with greater equity investment thus has superior resource leverage and this in turn increases control over corporate governance. Ownership determinants are identified as major factors in explaining the extent to which an investing firm has control over the style of an international strategic alliance’s corporate governance. Technology brought in by the foreign partner is commonly treated as a critical part of firm-specific resources, knowledge and capabilities and will be valued as equity for part of the investment. It plays a disproportionate role in specifying explicitly its power and control rights. From a research perspective, it becomes important to measure the effect that the various investment contributions make to the ownership, management and control of an international strategic alliance.
KeywordsCorporate Governance Technology Transfer Foreign Firm Strategic Alliance Local Firm
Unable to display preview. Download preview PDF.