Previous internationalization studies have focused on the entry modes employed by multinational firms but have not considered the contractual heterogeneity that underlies each mode. It is important to examine these contractual details, as the firm may be able to obtain some of the benefits typically associated with one entry mode while selecting another. In the case of international mergers and acquisitions (M&As), a key contractual variable is whether the parties agree to a performance-contingent payout structure, which can mitigate the risk of adverse selection. In this paper, we examine the antecedents of contingent payouts in the form of earnouts and stock payments. The results indicate that firms lacking international and domestic acquisition experience turn to contingent payouts when purchasing targets in high-tech and service industries. Firms tend to avoid contingent payouts in host countries with problems with investor protection and legal enforceability. Journal of International Business Studies (2004) 35, 19–32. doi:10.1057/palgrave.jibs.8400053

Small firms are thought to encounter various difficulties implementing strategic alliances. Due to these problems, they may be less able to reap the benefits of alliance adaptation, and the changes that do occur in alliances may not coincide with a small firm's interests. The evidence we present on contractual renegotiations in alliances suggests that small firms are no more or less likely to adjust their alliances' contracts in general. However, small firms tend to bear inefficiencies of two kinds in their collaborations. First, they are less likely to adapt alliances in the presence of governance misalignments. Second, our sampled small firms were more prone to make transaction-specific investments, which can stimulate "ex post "hold-up in the form of contractual renegotiations. Copyright Blackwell Publishing Ltd 2008.

Prior research over several decades has catalogued many positive motives underlying firms' decisions to engage in joint ventures and other forms of alliances. In this empirical analysis, we investigate whether agency problems brought about by the separation of ownership and control also stimulate the development of firms' joint venture portfolios. By focusing on joint ventures, as opposed to diversification in general or acquisitions, we address the recent debate on agency theory's domain. Results from a sample of U.S. manufacturing firms' alliance portfolios offer supporting evidence, and comparable findings are obtained for international and domestic joint ventures. Agency hazards are also found to bring about extensions of firms' nonequity alliance portfolios in both the international and domestic settings.

0 this paper examines cross-border mergers and acquisitions undertaken by U.s. companies to determine whether geographic distance directly affects these firms' governance decisions. 0 We find that U.S. firms tend to acquire higher stakes in geographically proximate targets than in remote ones. 0The paper also investigates the moderating effect of geographic distance on cultural distance and political risk. We find that as these two hazards increase, acquirers prefer shared ownership for proximate deals, and full ownership for acquisitions of geographically distant targets. These findings indicate that the previously-reported effects of cultural distance and political risk on FDI are not absolute, but they are moderated by geographic distance.