Acquisitions, Joint Ventures or Arm’s-Length Alliances? Analyzing the Determinants of the Choice of Growth Strategy in Brazil from 1996 through 2007

Abstract

This paper analyses the determinants of the choice among different firm growth strategies: acquisitions, joint ventures or arm’s-length alliances. Several theoretical perspectives offer a background to understanding how firms make this choice. However, most empirical studies in this field have been derived from firms in developed countries. In contrast, we turn our attention to the analysis of the growth process of firms in a particular developing country, Brazil. The results mostly support the learning perspective of the firm’s choice. In general, a firm’s previous experience in a specific strategy (e.g.: joint ventures) is significant to determine its future choice for the same strategy as a path to grow. Extending previous studies, we introduced some financial factors as explanatory variables but they showed no statistical significance.

Keywords

• acquisition
• joint venture
• strategic alliance
• growth strategy
• governance mode.