On 23 December 2004, the Director of the Foundation and Professor Paloma Almodóvar signed a research agreement aimed at analysing the factors explaining the behaviour of international joint ventures (JVs).
In today's globalised economic environment, economic organisations need to enter new markets in order to expand their competitive advantages. This is why the decision on the type of entry chosen by companies is of particular importance. Generally speaking, they will choose between indirect investments -exports and licences- and direct investments abroad -ECI and own subsidiaries-.
The difference between the above modes lies in the degree of engagement and control that the domestic company exercises abroad. The decision as to which mode to choose is a central issue in terms of its operability in international markets. Moreover, it will be the critical determinant of the likelihood of success of the investment abroad, especially in the case of foreign direct investment (FDI), since it is the most risky.
The research provided an answer to the question: what are the factors that condition organisations to choose the JIT over the wholly owned subsidiary as a mode of entry into foreign markets?
For the empirical analysis we used the Survey on Business Strategies conducted by the SEPI Foundation, which allowed us to analyse the impact of the explanatory factors on the aforementioned entry modalities. By inferring the results for the entire Spanish manufacturing sector, an approximate idea of the influence of the factors identified on the international behaviour of these companies can be obtained.
Professor Almodóvar's research was awarded two academic prizes: the Research Prize of the Economic and Social Council of the Community of Madrid (8th Edition) and the Renau Piqueras Research Prize of the Vall D'Albaida University Foundation (7th Edition). The work was published in 2007 as part of the Foundation's Economics and Business Collection.
