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Collaborative Ventures and Value of Learning: Integrating the Transaction Cost and Strategic Option Perspectives on the Choice of Market Entry Modes
Chi, Tailan McGuire, Donald J.
Chi, Tailan
McGuire, Donald J.
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Abstract
This paper employs a simple stochastic model to investigate how transaction cost and
strategic option considerations interact to influence a firm’s evaluation of collaborative
venturing as a market entry mode. After demonstrating how uncertainty about the market
and about the potential partner can add to the value of a collaborative venture, the paper
explicates a condition under which the option to acquire or sell out generates a positive
economic value for both of the partners. The interaction of transaction cost and strategic
option considerations is then examined, and a number of testable hypotheses are
proposed based on the theoretical analyses of the paper.
Description
This is the author's published version. The publisher's official version is available electronically from: http://www.jstor.org/stable/155286
Date
1996
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Palgrave Macmillan
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Citation
Chi, Tailan. (1996) Collaborative Ventures and Value of Learning: Integrating the Transaction
Cost and Strategic Option Perspectives on the Choice of Market Entry Modes. Journal of
International Business Studies, 27 (2), 285-307.