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The article presents a study based on the assumption that minority state ownership decreases investment risk in countries with low stability in terms of state investment policy. The impact of state investment policy stability on project risk is explored using transaction cost economics and institutional theory. It further mentions the risks associated with contract incompleteness and state opportunism which raise risks for private investors. The results suggests that in low policy stability countries, investment risk is reduced when private business partners have a controlling equity interest.

We examine whether and when publicly-legislated and privately-contracted dispute resolution mechanisms (DRMs) reduce risk for foreign investing firms. We theorize that publicly-legislated DRMs such as mandatory arbitration or mediation provisions decrease transaction costs associated with foreign investment by rendering initial project investment terms more complete and predictable for firms and less vulnerable to opportunistic change by host- country states. On the other hand, the risk-reducing impact of public DRMs diminishes when firms add their own privately-contracted DRM provisions to initial project terms. Public and private DRMs are risk-reducing substitutes. Analyses of 1033 investment projects announced in 50 countries from 2009- 2013 support our propositions: 1) the quality ('ease') of public DRMs reduces investment risk measured as the initial percentage of equity (not debt) funding an investment project; 2) the investment risk-reducing effect of public DRM ease is diminished for projects with a common private DRM provision - an 'off-take' contract provision; and 3) the investment risk-reducing effect of public DRM ease is diminished when the lead firm sponsoring a project has greater host-country and industry experience. Public DRMs reduce firm risk, but the reduction varies significantly with the firm and the initial terms of the firm's investment project contract. [ABSTRACT FROM AUTHOR]

In the context of high-tech industries, we develop and test a "location attractiveness" theoretical framework proposing that emerging market firms that are seeking to exploit existing capabilities are more likely to make similar acquisitions (i.e., acquisitions in developing country markets) while EMNEs seeking to explore new opportunities are more likely to make acquisitions in highly developed countries. Our theoretical framework also suggests that the tendency of EMNE exploitative acquisitions in developing countries is strengthened when EMNEs possess firm-specific advantages (FSAs) over other EMNEs, because EMNEs can better exploit their unique capability sets in other developing countries rather than in highly developed countries. For EMNE exploratory acquisitions, we also examine whether an EMNE's ability to recognize and integrate new technological knowledge strengthens the likelihood of EMNE exploratory acquisitions in highly developed countries, an examination which allows us to tease out whether highly developed countries are attractive because of greater technological innovation or because of better developed, more transparent markets for corporate control and intellectual property legal protections. Overall, our study provides some of the first theoretical explanation and empirical evidence regarding how exploratory and exploitative motivations by EMNEs and EMNEs' firm-specific capabilities affect the geographic location choice of EMNE cross-border acquisitions. [ABSTRACT FROM AUTHOR]