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Management and ownership control in foreign investments: An analysis of the influence of isomorphism and quality of institutions

Published online by Cambridge University Press:  16 December 2014

Mª de la Cruz Déniz-Déniz  and
Antonia Mercedes García-Cabrera
Mª de la Cruz Déniz-Déniz*
Affiliation:
Department of Business Administration, Facultad de Ciencias Económicas y Empresariales, Universidad de Las Palmas de Gran Canaria, Campus Universitario de Tafira, Canary Islands, Spain
Antonia Mercedes García-Cabrera
Affiliation:
Department of Business Administration, Facultad de Ciencias Económicas y Empresariales, Universidad de Las Palmas de Gran Canaria, Campus Universitario de Tafira, Canary Islands, Spain
*
Corresponding author: [email protected]
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Abstract

According to new institutionalism, this work simultaneously analyzes different methods of operating abroad – that is, joint venture, acquisition and greenfield – in terms of the level of management and ownership control they provide. This research studies the regulative and cognitive institutions that explain the multinational company’s choice of a particular level of that control for its subsidiaries years after entering a foreign country. We analyze 109 German firms with subsidiaries in Spain. The results show that the level of management and ownership control for the subsidiary responds to the institutional quality of the host country and the internal and especially external isomorphic pressures.

Keywords

foreign operation methodnew institutional theoryinstitutional qualitymimetismstructural equation modeling
Type
Research Article
Information
Journal of Management & Organization , Volume 20 , Issue 6 , November 2014 , pp. 764 - 783
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2014 

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