An internalization approach to joint ventures: Coca-Cola in China

Wai Kwong Mok, Xiudian Dai, Godfrey Yeung

Research output: Journal article publicationJournal articleAcademic researchpeer-review

7 Citations (Scopus)

Abstract

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 article 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.
Original languageEnglish
Pages (from-to)39-58
Number of pages20
JournalAsia Pacific Business Review
Volume9
Issue number1
DOIs
Publication statusPublished - 1 Jan 2002

ASJC Scopus subject areas

  • Business and International Management

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