View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by ScholarBank@NUS ASYMMETRIC ALLIANCES IN JAPANESE FIRMS’ OVERSEAS INVESTMENT HU TIANYOU A DISSERTATION SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN MANAGMENT DEPARTMENT OF STRATEGY AND POLICY NUS BUSINESS SCHOOL NATIONAL UNIVERSITY OF SINGAPORE 2016 1 DECLARATION I hereby declare that this thesis is my original work and it has been written by me in its entirety. I have duly acknowledged all the sources of information which have been used in the thesis. This thesis has also not been submitted for any degree in any university previously. 2 ACKNOWLEDGEMENTS My first son was born in the spring of 2013 when I just finished my coursework in National University of Singapore and started with this dissertation. I named him Jinfeng (謹豐), which meant “to complete oneself prudently” in Chinese. I fetched these two beautiful characters from a verse of the great poet Qu Yuan (屈原), in the hope that it stimulates my son to be fond of learning and motivates myself in my PhD study. I dedicate this piece of work to my wife, Liu Zheng, who gave up a good job and a comfortable life in Beijing to work as my cook, secretary and research assistant in Singapore. Fully engaged in my study, I was no more than a giant baby that not only helped nothing with housework but also had aperiodic depression due to the harshness of research. I could never have finished this dissertation without her support and sacrifice. This dissertation is also impossible without the supervision and help of Professor Andrew Delios. As my supervisor, Professor Delios made himself a good example with his engagement and enthusiasm to academia. He guided me through the whole process of PhD candidature and encouraged me to explore the research areas that interested me. My dissertation committee members Professor James Lincoln and Dr. Heeyon Kim spent a lot of time on discussing with me and helping me develop this dissertation. Professor Kulwant Singh and Dr. Markus Taussig gave me many insightful comments. My PhD colleagues Dr. Zhang Xing, Mr. Siddharth Natarajan and Mr. Daniel Mack read my papers and provided useful feedback. I appreciate all other faculty members, colleagues, and friends who have ever helped me during the past five years. I thank my parents who tolerated my absence from home and supported me with trust, understanding and unbounded love. 3 CONTENTS DECLARATION........................................................................................................................... 2 ACKNOWLEDGEMENTS ......................................................................................................... 3 SUMMARY ................................................................................................................................... 7 OUTLINE .................................................................................................................................... 10 Chapter 1 Introduction and Theory Foundation............................................................................ 11 1.1 Motivation: partner asymmetries in alliances ..................................................................... 11 1.2 Background of Essay One: partner asymmetry and alliance longevity .............................. 16 1.3 Background of Essay Two: partner asymmetry and small firms’ strategies ....................... 20 1.4 Resource dependence theory and alliances ......................................................................... 23 1.5 Network theory and alliances .............................................................................................. 27 ESSAY ONE ................................................................................................................................ 30 Chapter 2 Introduction .................................................................................................................. 31 Chapter 3 Hypotheses Development: Nonmonotonic Effects ...................................................... 34 3.1 Socially asymmetric alliances ............................................................................................. 34 3.2 Hazards of social asymmetry .............................................................................................. 35 3.3 Benefits of social asymmetry .............................................................................................. 37 3.4 U-shaped effects of social asymmetry on alliance dissolution ........................................... 41 3.5 Internal competition ............................................................................................................ 43 3.6 External competition ........................................................................................................... 44 3.7 Firm-specific uncertainty .................................................................................................... 45 Chapter 4 Research Design and Method ....................................................................................... 47 4.1 Data and sample .................................................................................................................. 47 4.2 Variables .............................................................................................................................. 48 4.3 Analytic models and endogeneity issue .............................................................................. 55 Chapter 5 Results .......................................................................................................................... 57 5.1 Regression results ................................................................................................................ 57 5.2 Robustness check ................................................................................................................ 63 Chapter 6 Conclusion and Discussion .......................................................................................... 66 ESSAY TWO ............................................................................................................................... 72 Chapter 7 Introduction .................................................................................................................. 73 4 Chapter 8 Theory and Hypotheses ................................................................................................ 76 8.1 SMEs’ alliances with large and resourceful firms .............................................................. 76 8.2 SMEs’ strategies for benefits from asymmetric alliances ................................................... 77 8.3 Benefits of asymmetric alliances in international expansion .............................................. 79 8.4 Leveraging unique value ..................................................................................................... 81 8.5 Excessive embeddedness to dyadic relationships ............................................................... 82 8.6 Exclusivity in partnering ..................................................................................................... 84 Chapter 9 Research Design and Methods ..................................................................................... 87 9.1 Japanese trading companies ................................................................................................ 87 9.2 Data and sample .................................................................................................................. 89 9.3 Variables and analytical models .......................................................................................... 91 Chapter 10 Results ...................................................................................................................... 100 Chapter 11 Conclusion and Discussion ...................................................................................... 106 BIBLIOGRAPHY ..................................................................................................................... 110 5 FIGURES Figure 1: Centrality asymmetry and alliance dissolution (1) ........................................................ 40 Figure 2: Centrality asymmetry and alliance dissolution (2) ........................................................ 40 Figure 3: Centrality asymmetry and predicted dissolution likelihoods of Japanese equity alliances ....................................................................................................................................................... 58 TABLES Table 1. The duration of socially asymmetric alliances ............................................................... 42 Table 2: Descriptive statistics and inter-correlation of main variables ......................................... 54 Table 3: Discrete time survival analysis of socially asymmetric alliances ................................... 59 Table 4: Robustness check regressions ......................................................................................... 65 Table 5: Main variables and measures .......................................................................................... 92 Table 6: Descriptive statistics and inter-correlation of main variables ......................................... 97 Table 7: Statistics of the sample for the first-step regression of Heckman Corrections ............... 98 Table 8: Probit panel regression for alliance decision with Sogo Shosha ...................................