Title

Equity Control and the Survival of International Joint Ventures: A Contingency Approach

Publication Type

Journal Article

Publication Date

2005

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.

Keywords

Equity control, International joint venture, Contingency approach

Discipline

Entrepreneurial and Small Business Operations

Research Areas

Finance

Publication

Journal of Business Research

Volume

58

Issue

6

First Page

736

Last Page

745

ISSN

0148-2963

Identifier

10.1016/j.jbusres.2003.08.012

Publisher

Elsevier