Transaction cost determinants and ownership-based entry mode choice: A meta-analytical review

Hongxin Zhao, Yadong Luo, Taewon Suh

Research output: Contribution to journalArticle

361 Scopus citations

Abstract

Entry mode choice is a critical ingredient of international entry strategies, and has been voluminously examined in the field. The findings, however, are very mixed, especially with respect to transaction-cost-related factors in determining the ownership-based entry mode choice. This study conducted a meta-analysis to quantitatively summarize the literature and empirically generalize more conclusive findings. Based on the 106 effect sizes of 38 empirical studies, the meta-analysis shows that the findings of the existing studies are moderated to varying degrees by both study-setting factors and statistical artifacts, although the combined overall effects of transaction cost-based determinants are consistent with the predictions of transaction cost economics. We extensively discuss the implications of meta-analytical results, especially moderating effects of location, country of origin, industry type, and statistical artifacts, highlight the measurement adequacy, equivalence, and multidimensionality of transaction cost determinants, and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice.

Original languageEnglish (US)
Pages (from-to)524-544
Number of pages21
JournalJournal of International Business Studies
Volume35
Issue number6
DOIs
StatePublished - Nov 1 2004

Keywords

  • Entry mode
  • FDI
  • Meta-analysis

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

Fingerprint Dive into the research topics of 'Transaction cost determinants and ownership-based entry mode choice: A meta-analytical review'. Together they form a unique fingerprint.

  • Cite this