Interaction of CEOs attitude towards risk and institution in deciding entry strategies -In Korean Biotechnology Industry-

Abstract

According to previous research, institution influences choice of the entrants and needs for resources impact entry strategies in different contexts. This perspective calling for considerations of institutional effects with their integration with RBV, however, lacks delicacy in that many firms nowadays do not seek either tangible asset or intangible assets only. By setting CEOs attitude towards risk, this paper can explore beyond Meyer(2008)s review, which focused on the cost side rather than risk involved. Going beyond transaction cost and information cost, risk management actually matters in choosing entry mode of FDI. By focusing on each risk of entry mode choices, we can see how CEOs attitude actually influences entry mode decisions, through the CEOs perception of the risk involved. To be specific, this paper examines how multinational companies choose among three modes of entry of FDI

JV, acquisition, and Greenfield operation. Hypotheses are tested by survey data with archival data from Korean Biotechnology Industry. Korean companies enter into 7 different Asian countries which show variation in the development degree of the institutions.