Overcoming Information Asymmetry in Foreign Entry Strategy: The Impact of Reputation

Traditional transaction cost economics (TCE) approaches to foreign entry strategy have assumed that the information asymmetry regarding a local firm's behavioral intent cannot be overcome, thus all potential transaction partners must be treated as potentially opportunistic. However, this ‘assumption of corporate homogeneity’ results in conflicting predictions and has led researchers to question the suitability of TCE for predicting foreign entry...