publication . Article . 2002

An Internalization Approach to Joint Ventures: Coca-Cola in China

Vincent Mok; Godfrey Yeung; Xiudian Dai;
Open Access
  • Published: 01 Oct 2002
  • Country: United Kingdom
Abstract
In the presence of high transaction costs due to market imperfections, it is normally less expensive for multinational corporations (MNCs) to conduct their business activities in new markets through their internal corporate structures rather than by relying on the markets. Based on a case study of Coca-Cola's entry into the Chinese market, this paper tests the applicability of internalization theory to explaining the entry mode choices of MNCs in developing countries. Internalization theory reveals the economic rationale that was behind the changes in Coca-Cola's modes of entry as it moved from franchising to joint ventures (JVs) with selected local partners, an...
Subjects
free text keywords: HD28, H1, Internalization, media_common.quotation_subject, media_common, Internalization theory, medicine.medical_specialty, medicine, Multinational corporation, China, Developing country, Coca cola, Transaction cost, Social venture capital, Market economy, International trade, business.industry, business
Related Organizations
34 references, page 1 of 3

Beamish, P. (1988), Multinational Joint Ventures in Developing Countries. London: Routledge.

Berg, S., and Friedman, P. (1980), 'Corporate Courtship and Successful Joint Ventures', California Management Review, Vol.22, No.3, pp.85-91.

Buckley, P. (1992), Studies in International Business. London: St. Martin's Press.

Buckley, P. and Casson, M. (1976), The Futures of the Multinational Enterprise. London: Macmillan. [OpenAIRE]

Buckley, P. and Casson, M. (eds.) (1985), The Economic Theory of the Multinational Enterprise: Selected Papers. London: Macmillan. [OpenAIRE]

Casson, M. (1990), Enterprise and Competitiveness: A Systems View of International Business. Oxford: Oxford University Press.

Caves, R. (1982), Multinational Enterprises and Economic Analysis. Massachusetts: Cambridge University Press.

Clifford, M. (1993), 'How Coke Excels', Far Eastern Economic Review, 30 December, p.39.

Contractor, F. (1985), 'A Generalised Theorem for Joint-venture and Licensing Negotiations', Journal of International Business Studies, Vol.2, pp.23-50. [OpenAIRE]

Dong, F. (1987), 'Increasing the Vitality of Enterprises', in Tidrick, G. and Chen, J. (eds.) China's Industrial Reform, Oxford: Oxford University Press, pp.44-59.

Dunning, J.H. (1981), 'Explaining the International Direct Investment Position of Countries: Towards a Dynamic or Developmental Approach', Weltwirtschaftliches Archiv, Vol.119, pp. 30-64. Reprinted in Black, J. and Dunning, J.H. (eds.), (1982), International Capital Movements: Papers of the Fifth Annual Conference of the International Economics Study Group. London: Macmillan, pp. 84-121. [OpenAIRE]

Erramilli, M.K. (1996), 'Nationality and Subsidiary Ownership Patterns in Multinational Corporations', Journal of International Studies, Vol.27, No.2, pp.225-48. [OpenAIRE]

Hayek, F.A. (1945), 'The Use of Knowledge in Society', American Economic Review, Vol. XXXV, September, pp.519-530.

Hennart, Jean-François. (1982), A Theory of Multinational Enterprise. Michigan: University of Michigan Press.

Hennart, Jean-François. (1991), 'The Transaction Cost Theory of the Multinational Enterprise' in C.N. Pitelis and R. Sugden (eds.), The Nature of the Transnational Firm. London: Routledge, pp. 81-116. Reprinted in Gomes-Casseres, B. and Yoffie, D.B. (eds.), (1993), The International Political Economy of Direct Foreign Investment: Volume I. Hants: Edward Elgar Publishing Ltd, pp. 139-74.

34 references, page 1 of 3
Any information missing or wrong?Report an Issue