Technology interdependence and entry modes of the Taiwanese technological multinational companies: moderating effects of political instability, technological uncertainty, and Confucian dynamism

ABSTRACT

This study aims to examine how technology interdependence and three environmental variables, namely political instability, technological uncertainty and Confucian dynamism, in the host country collectively influence Taiwanese technological multinational company’s (MNC) entry mode choice between joint venture (JV) and wholly owned subsidiary (WOS). Grounded on theories of transaction cost economies and organisational design, this study hypothesises a positive technology interdependence–WOS relationship that can be explained by appropriation and coordination concerns. Moreover, the aforementioned relationship can be positively moderated by technological uncertainty while negatively moderated by political instability and Confucian dynamism. These hypotheses were examined and supported using logistic regressions in the analysis of 195 foreign entries undertaken by Taiwanese information and electronic MNCs.

KEYWORDS:

• Entry mode choice
• technology interdependence
• political instability
• technological uncertainty
• Confucian dynamism

Notes on contributor

Liang-Hung Lin is Professor at Department of International Business, National Kaohsiung University of Science and Technology (Taiwan). His main research interests concern international business and organisational innovation. He has published academic papers in the Journal of Management, Long Range Planning, European Management Journal, Journal of Business Ethics, Journal of Organisational Change Management, International Journal of Human Resource Management, International Journal of Technology Management and Total Quality Management and Business Excellence.

Disclosure statement

No potential conflict of interest was reported by the author.