The choice between mergers/acquisitions and joint ventures: the case of Japanese investors in the United States

Article Abstract:

A study was conducted to examine two alternative methods of pooling similar and complementary assets, namely, the merger/acquisition and the greenfield equity joint venture. The two choices have been tested on a sample of Japanese manufacturers entering the US market. Results indicate that greenfield equity joint ventures are chosen over acquisitions when the desired assets are comingled with nondesired assets. This happens when the US firm owning them is large and not divisionalized. Other cases when joint ventures are preferred over acquisitions are when the Japanese investors have little previous experience in the American market, have the same product as US partners and when the industry being penetrated is growing neither very rapidly nor very slowly.

Acquisitions & Mergers Analysis, Multinational Corporations, Foreign investments, Acquisitions and mergers, Foreign corporations, Financial analysis

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'Trojan horse' or 'workhorse'? The evolution of U.S.-Japanese joint ventures in the United States

Article Abstract:

An investigation of US-Japanese joint ventures established by Japanese investors and operating in the US in 1980 disproves the Trojan Horse description of such ventures. Earlier authors argued that Japanese firms use joint ventures as Trojan Horses by entering into such ventures with foreign firms but discontinue the enterprises once they have already learned from their US partners. To test this argument, a study was conducted by examining all the 58 US-Japanese manufacturing joint ventures. Findings revealed that most of the ventures were maintained. The Japanese took total control only in a few cases and their motivation for these instances was not knowledge acquisition. Therefore, the Trojan Horse view is not supported.

MISCELLANEOUS MANUFACTURING INDUSTRIES, Manufacturing NEC, All Other Miscellaneous Manufacturing, Manufacturing industry, Manufacturing industries, Japan

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A transaction costs theory of equity joint ventures

Article Abstract:

An equity joint ventures transaction costs theory is presented. The theory differentiates 'link' from 'scale' joint ventures. Scale joint ventures stem from corporate parents' desire to internalize a failing market at a time when scale or scope economies associated with indivisibilities make total assets ownership inefficient. Link joint ventures occur when market failures are simultaneous for the services of two or more assets when the assets involved are for company-specific public goods and acquisition of the company holding them would involve high management expense.

Cost accounting

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