Board Characteristics, Managerial Incentives, and the Choice Between Foreign Acquisitions and International Joint Ventures

摘要

Drawing on the agency theory, corporate governance, and international business literatures, the authors link board characteristics and managerial incentives to the choice between acquisitions and joint ventures by firms entering foreign markets. Hypothesized relationships are examined in the context of 383 acquisition and 171 joint venture entries undertaken by relatively nondi-versified firms in the U.S. manufacturing sector during the period 1991 to 1999. Findings indicate that firms with boards characterized by a higher proportion of outside directors and independent leadership structures (i.e., the absence of duality) are more inclined to favor acquisitions over joint ventures in foreign market entry. Likewise, the data reveal that firms where insiders have greater equity ownership and compensation structures that are more closely linked to long-term firm performance prefer acquisitions over joint ventures. Implications of the findings along with directions for future research are discussed.