Implicit Incentives in International Joint Ventures (eBook)

Dr. Fan Wu received her Ph.D. in Management from the Otto von Guericke University of Magdeburg under the supervision of Prof. Dr. Birgitta Wolff (Chair in International Management).

Foreword 6
Preface 8
Table of Contents 10
List of Tables 13
List of Figures 15
List of Abbreviations 17
List of Variables 19
1. Implicit incentives of international joint venture managers – an introduction 21
2. Joint venture manager as a common agency 27
2.1 Delegation of management to a joint venture manager 27
2.1.1 Importance of joint venture manager’s loyalty as a consequence of incomplete contracting 29
2.1.2 Location specificity of joint venture assets 32
2.1.3 Implicit incentives for an international joint venture manager 37
2.1.4 Cultural affinity as an implicit incentive 37
2.1.5 Career perspective as an implicit incentive 45
2.2 Choice of research methods 54
2.3 Countries in the samples 55
3. Expert interviews among Sino-German jointventure and parent firm managers 61
3.1 Questionnaire development and pilot interviews 61
3.2 Selection of the sample and contact to the companies 63
3.3 The interview procedure, data input, cross inspection and conversion 67
3.4 Interview results on the influence of nationality and career perspectives 68
3.4.1 The influence of nationality on SGJV managers’ decisions 68
3.4.2 The career perspective of SGJV managers 74
4. Cultural affinity of managers of internationaljoint ventures: an experimental study 78
4.1 The model, the equilibrium, and the hypotheses 78
4.1.1 The model 79
4.1.2 Game-theoretic equilibrium (payoff-maximizing agents) 83
4.2 Experimental hypotheses, design and procedure 84
4.3 Data analysis 91
4.3.1 Managers’ allocation decisions – Hypothesis 1a 91
4.3.2 Investors’ investment decisions – Hypothesis 1b 99
4.4 Summary and discussion of the cultural affinityexperiments 103
5. Career perspective for managers of internationaljoint venture managers: an experimental study 106
5.1 The model and the equilibrium 107
5.1.1 The model with ex ante offers 107
5.1.2 Game-theoretic equilibrium (payoff-maximizing agents) 112
5.1.3 Alternative timing of the offers: the model with ex post offers 116
5.2 Experimental hypotheses, design and procedure 117
5.3 Data analysis 121
5.3.1 Managers’ allocation decisions – Hypotheses 2a and 3a 121
5.3.2 Investors’ transfer payment offers – Hypotheses 2b and 3b 126
5.3.3 Overbidding for the manager’s favor 133
5.4 Summary and discussion of the career perspectiveexperiments 136
6. The effects of former acquaintance and work experience: alternative samples 138
6.1 Social distance and demographical characteristics of students and managers 139
6.1.1 Social distance due to the players’ former acquaintance 139
6.1.2 Differences between students and managers 141
6.2 The experimental model and equilibrium 145
6.3 Experiments with Group Student and MBA samples 146
6.4 Results from experiments with the Group Student and MBA samples 148
6.4.1 Managers’ allocation decisions 149
6.4.2 Investors’ transfer payment offers 150
6.5 Results from the discussion with the MBA subjects 155
6.6 Summary and discussion of the alternative samples 164
7. Managerial implications and research outlook 166
Implications for personnel management and policy making 168
Future research perspectives 170
List of References 173
Appendices 187
Appendix 1: Hofstede’s index scores for China, Germany, South Korea, and the U.S.A 187
Appendix 2: Questionnaire of Sino-German joint venture in-terviews 188
Appendix 3: Proof of game-theoretical equilibrium 214
Appendix 4: Experimental instructions of cultural affinity: Chinese manager treatment (in the U.S.) 216
Appendix 5: Experimental instructions of cultural affinity: non-Chinese manager treatment (in the U.S.) 220
Appendix 6: Experimental instructions of career perspective: Ex_Ante_ Offer treatment 224
Appendix 7: Experimental instructions of career perspective: Ex_Post_ Offer treatment 228
Appendix 8: Scripts of MBA discussion sessions 232
Appendix 8.1: Discussion after the first and second sessions 233
Appendix 8.2: Discussion after the third and fourth sessions 250