Management and ownership control in foreign investments: an analysis of the influence of isomorphism and quality of institutions

Abstract

According to new institutionalism, this work simultaneously analyzes different methods of operating abroad - that is, joint venture, acquisition and greenfield - in terms of the level of management and ownership control they provide. This research studies the regulative and cognitive institutions that explain the multinational company's choice of a particular level of that control for its subsidiaries years after entering a foreign country. We analyze 109 German firms with subsidiaries in Spain. The results show that the level of management and ownership control for the subsidiary responds to the institutional quality of the host country and the internal and especially external isomorphic pressures.