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International Joint Venture Configurations in Big Emerging Markets

Hemant Merchant (Associate professor of international strategy in the Barry Kaye College of Business at Florida Atlantic University)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 19 November 2008

1091

Abstract

Empirical studies of the shareholder valuation impact of firms’ international joint venture (IJV) participation have usually emphasized firm‐specific factors, but rarely extended their analysis to location‐specific factors. This is a crucial omission because the two sets of factors are interconnected vis‐a‐vis their influence on firms’ performance. Yet, previous work has neither identified how the two sets of factors complement each other nor investigated the effect of these complementarities on the shareholder value of firms who enter into IJVs. This study attempts to fill these gaps. It develops a typology of IJVs and then performs cluster analysis on a sample of 241 equity IJVs. Results indicate eight clusters in the data, including three clusters with positive shareholder value. In deriving support for its six hypotheses, the study highlights both value‐creating and value‐neutral configurations of firm‐ and location‐specific variables.

Keywords

Citation

Merchant, H. (2008), "International Joint Venture Configurations in Big Emerging Markets", Multinational Business Review, Vol. 16 No. 3, pp. 93-119. https://doi.org/10.1108/1525383X200800015

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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