TY - JOUR
T1 - Pitting real options theory against risk diversification theory
T2 - International diversification and joint ownership control in economic crisis
AU - Chung, Chris Changwha
AU - Lee, Seung Hyun
AU - Beamish, Paul W.
AU - Southam, Colette
AU - Nam, Daeil Dale
PY - 2013/1
Y1 - 2013/1
N2 - This study examines how MNE divestment decisions differ according to real options vs. risk diversification perspectives. We develop competing hypotheses in relation to international diversification and joint ownership control. Empirical results give consistent support to the real options perspective. We find that large MNEs with greater international diversification are less likely to divest their subsidiaries during times of economic crisis. The negative effect of joint ownership control is however manifested in both crisis-stricken and non-crisis country subsidiaries as well as in their interaction effect.
AB - This study examines how MNE divestment decisions differ according to real options vs. risk diversification perspectives. We develop competing hypotheses in relation to international diversification and joint ownership control. Empirical results give consistent support to the real options perspective. We find that large MNEs with greater international diversification are less likely to divest their subsidiaries during times of economic crisis. The negative effect of joint ownership control is however manifested in both crisis-stricken and non-crisis country subsidiaries as well as in their interaction effect.
UR - http://www.scopus.com/inward/record.url?scp=84868683108&partnerID=8YFLogxK
U2 - 10.1016/j.jwb.2012.06.013
DO - 10.1016/j.jwb.2012.06.013
M3 - Article
AN - SCOPUS:84868683108
SN - 1090-9516
VL - 48
SP - 122
EP - 136
JO - Journal of World Business
JF - Journal of World Business
IS - 1
ER -