Introduction

Abstract

The subject of creating equity joint ventures or wholly owned subsidiaries in developing countries has attracted the attention of many international business researchers. The effects or determinants of full or shared ownership options have been some of the most important strategic issues to be decided in foreign direct investment (FDI) areas over the last thirty years. Full equity ownership has been the preferred mode of entry for most multinational corporations (MNCs) in developing countries, because many foreign managers prefer to hold tight to managerial control rather than to relinquish authority to host country managers (Holt 1998). Full equity ownership characterises the ultimate form of international management involvement in countries, and represents the risk profile of available control options.