Equity control and the survival of international joint ventures : a contingency approach

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)736-745
Journal / PublicationJournal of Business Research
Volume58
Issue number6
Online published3 Feb 2004
Publication statusPublished - Jun 2005
Externally publishedYes

Abstract

This study attends to equivocal results regarding the relationship between equity control and international joint venture (IJV) performance by proposing a transaction-cost-based contingency framework. We examined the moderating effects of asset specificity and uncertainty on the relationship between foreign parent equity control and IJV survival in an empirical setting of Japanese IJVs in 12 Asian countries in the 1985-1996 period. Our findings suggest that in the presence of high asset specificity, high levels of foreign equity control can lead to higher IJV survival rates. Furthermore, we find that social knowledge can serve as a substitute for equity control in IJVs and contribute to higher IJV survival rates.

Research Area(s)

  • Contingency approach, Equity control, International joint venture