Transaction cost determinants and ownership-based entry mode choice

A meta-analytical review

Hongxin Zhao, Yadong Luo, Taewon Suh

Research output: Contribution to journalArticle

341 Citations (Scopus)

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 2004

Fingerprint

Costs
Economics
Ownership
Entry mode choice
Transaction costs
Industry
Meta-analysis
Factors
Entry strategy
Prediction
Empirical study
Moderating effect
Effect size
Multidimensionality
Country of origin
Transaction cost economics
Adequacy
Equivalence

Keywords

  • Entry mode
  • FDI
  • Meta-analysis

ASJC Scopus subject areas

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

Cite this

Transaction cost determinants and ownership-based entry mode choice : A meta-analytical review. / Zhao, Hongxin; Luo, Yadong; Suh, Taewon.

In: Journal of International Business Studies, Vol. 35, No. 6, 11.2004, p. 524-544.

Research output: Contribution to journalArticle

@article{858c49c2ce7945fc8b3f4e3265f5c6da,
title = "Transaction cost determinants and ownership-based entry mode choice: A meta-analytical review",
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.",
keywords = "Entry mode, FDI, Meta-analysis",
author = "Hongxin Zhao and Yadong Luo and Taewon Suh",
year = "2004",
month = "11",
doi = "10.1057/palgrave.jibs.8400106",
language = "English (US)",
volume = "35",
pages = "524--544",
journal = "Journal of International Business Studies",
issn = "0047-2506",
publisher = "Palgrave Macmillan Ltd.",
number = "6",

}

TY - JOUR

T1 - Transaction cost determinants and ownership-based entry mode choice

T2 - A meta-analytical review

AU - Zhao, Hongxin

AU - Luo, Yadong

AU - Suh, Taewon

PY - 2004/11

Y1 - 2004/11

N2 - 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.

AB - 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.

KW - Entry mode

KW - FDI

KW - Meta-analysis

UR - http://www.scopus.com/inward/record.url?scp=10844279001&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=10844279001&partnerID=8YFLogxK

U2 - 10.1057/palgrave.jibs.8400106

DO - 10.1057/palgrave.jibs.8400106

M3 - Article

VL - 35

SP - 524

EP - 544

JO - Journal of International Business Studies

JF - Journal of International Business Studies

SN - 0047-2506

IS - 6

ER -