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    A Dynamic Model of the Choice of Mode for Exploiting Complementary Capabilities

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    9Chi2009JIBS.pdf (1.112Mb)
    Issue Date
    2009
    Author
    Chi, Tailan
    Seth, Anju
    Publisher
    Palgrave Macmillan
    Type
    Article
    Article Version
    Scholarly/refereed, author accepted manuscript
    Metadata
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    Abstract
    This paper examines the choice of mode for an MNC and a local firm to exploit their complementary capabilities. We develop a combined real options and game-theoretic model of modal choice by incorporating a range of factors drawn from the dynamic capabilities theory and transaction cost or organizational economics. The factors scrutinized in the model include the parties’ absorptive capacities, frictions in knowledge and asset markets and associated incentive problems, cost of switching from one mode to another and cost associated with power-jockeying. The model uses simulation to examine how these factors interact to influence the choice of mode. The results identify a number of conditions for one factor to dominate another and help to reconcile different theories that have made contradicting predictions with regard to the effects of such factors as uncertainty and capability divergence on the optimal choice of mode.
    Description
    This is the author's final draft. The publisher's official version is available from: http://dx.doi.org/10.1057/jibs.2008.65
    URI
    http://hdl.handle.net/1808/11021
    DOI
    https://doi.org/10.1057/jibs.2008.65
    Collections
    • Center for East Asian Studies Scholarly Works [351]
    • School of Business Scholarly Works [212]
    Citation
    Chi, Tailan. (2009) A Dynamic Model of the Choice of Mode for Exploiting Complementary Capabilities. Journal of International Business Studies, 40 (3), 365-387. http://dx.doi.org/10.1057/jibs.2008.65

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    Contact KU ScholarWorks
    785-864-8983
    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    785-864-8983

    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    Image Credits
     

     

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