An internalization approach to joint ventures: the case of Coca-Cola in China
journal contributionposted on 2023-06-07, 04:44 authored by Vincent Mok, Xiudian Dai, Godfrey Yeung
In the presence of high transaction costs due to market imperfections, it is normally less expensive for multinational corporations (MNCs) to conduct their business activities in new markets through their internal corporate structures rather than by relying on the markets. Based on a case study of Coca-Cola's entry into the Chinese market, this paper tests the applicability of internalization theory to explaining the entry mode choices of MNCs in developing countries. Internalization theory reveals the economic rationale that was behind the changes in Coca-Cola's modes of entry as it moved from franchising to joint ventures (JVs) with selected local partners, and more recently to the combination of JVs and franchising.
JournalAsia Pacific Business Review
PublisherTaylor & Francis
Department affiliated with
- Geography Publications
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