The Effect of Organizational Slack and Unrelated Diversification on Value of Growth Option-The Moderating Role of Emerging market

• Main Authors: Yun-Ling Huang, 黃韻玲
• Other Authors: Chung-Jen Chen
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/51131241834410044117

碩士 === 國立臺灣大學 === 商學研究所 === 100 === Joint venture has been a main strategy in strategic alliances when firms expand their business into global market. We referenced with previous studies the Real Option Theory and the Resource Based view and figured out the relationship between value of growth option and factors like diversification, organizational slack and geographic location of international joint venture. We collected data from SDC and Compustat database during 2000 to 2009 in US. We examined the relationship between unrelated diversification, absorbed and unabsorbed slack, value of growth option and moderating role which was the number of international joint venture in emerging economies. The result implicates that absorbed slack negatively affect value of growth option and unrelated diversification of joint venture do a positive effect on performance. Moderator would strengthen the positive relationship between industry unrelated diversification and growth option value. It also abates the negative relationship between organization absorbed slack and growth option value. We obtain more understanding of growth option value and provided a direction for managers to think in international investments.