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Published by: Allied Business Academies
Originally published in: "Journal of International Business Research", 2009
Length: 20 pages

Abstract

The paper examines the influence of differences between partners on the control of international joint ventures (IJVs) and its subsequent performance performance. The term 'partners' differences' here refers to their perceptions of differences in cultures, objectives when entering IJVs, and partners' business relatedness to their IJVs. IJV control is conceptualized across three dimensions including mechanism, focus, and extent. The empirical evidence is based on a survey of Finnish which established firms having established IJVs with local firms in the 1990s. The results showed that the higher the level of the partners' perceived differences with their local counterparts were, the more likely they were to exercise formal, broad, and tight control over their IJVs. The results also indicate that in the case of major differences between partners, formal, broad and tight control by foreign partners lead to better IJV performance. In the case of lower level differences between partners, social, narrow, and loose control by foreign partners lead to better IJV performance.

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Abstract

The paper examines the influence of differences between partners on the control of international joint ventures (IJVs) and its subsequent performance performance. The term 'partners' differences' here refers to their perceptions of differences in cultures, objectives when entering IJVs, and partners' business relatedness to their IJVs. IJV control is conceptualized across three dimensions including mechanism, focus, and extent. The empirical evidence is based on a survey of Finnish which established firms having established IJVs with local firms in the 1990s. The results showed that the higher the level of the partners' perceived differences with their local counterparts were, the more likely they were to exercise formal, broad, and tight control over their IJVs. The results also indicate that in the case of major differences between partners, formal, broad and tight control by foreign partners lead to better IJV performance. In the case of lower level differences between partners, social, narrow, and loose control by foreign partners lead to better IJV performance.

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