Determinants of Equity Ownership Stake in Foreign Entry Decisions: A Systematic Review and Research Agenda

Chhabra, Ankita; Popli, Manish; Li, Yi

Abstract

In international business (IB), the level of equity ownership adopted by a firm is an important decision. In this study, we review and synthesize the findings of 105 empirical studies published in prominent IB and management journals on the determinants of equity ownership stake in foreign investment decisions, published between 1991 and 2020. Three primary theoretical lenses ‒ organizational learning perspective, transaction cost economics and institutional perspective – are adopted to catalogue and synthesize the existing literature. We find that, despite the proliferation of IB studies on antecedents of level of equity ownership decisions, many unanswered questions remain. We also find that theoretical fault lines impede progress in this research stream. Based on the literature review, we suggest a research programme that includes accounting for the behavioural view of decision-making in the organization, shifting from an atomistic perspective to a network perspective of the firm, having a better understanding of the process of internationalization and considering industry heterogeneity as well as the host country's characteristics.

Citation

Chhabra, A., Popli, M., & Li, Y. (2021). Determinants of Equity Ownership Stake in Foreign Entry Decisions: A Systematic Review and Research Agenda. International Journal of Management Reviews, 23(2), 244-276. https://doi.org/10.1111/ijmr.12248

• Journal Article Type: Article
• Acceptance Date: Dec 17, 2020
• Online Publication Date: Jan 29, 2021
• Publication Date: 2021-04
• Deposit Date: Sep 15, 2022
• Journal: International Journal of Management Reviews
• Print ISSN: 1460-8545
• Electronic ISSN: 1468-2370
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 23
• Issue: 2
• Pages: 244-276
• DOI: https://doi.org/10.1111/ijmr.12248
• Public URL: http://researchrepository.napier.ac.uk/Output/2891422