The relationship between firm resources and joint ventures: revisited
Abstract
Purpose
This study is a replication of Wolff and Reed’s (2000) work. The purpose of this paper is to examine how the combination of resources brought to joint ventures influence parent-firm performance. This study is also interested in whether or not the exposure of immobile resources through the semi-transparent membrane of the joint venture can have negative effects on parent-firm performance.
Design/methodology/approach
The sample consists of two-parent joint ventures formed by publicly traded US firms between 1997 and 2013. The event-study methodology is used to calculate each parent-firm’s abnormal returns. This work also uses content analysis to analyze parent-firms’ annual reports (10-K).
Findings
While Wolff and Reed’s results on resource allocation within joint ventures were not statistically significant, this replication study provided strong support to the resource allocation hypothesis. It was found that intangible resource heterogeneity within a joint venture creates higher performance gains for parent-firms than tangible resource heterogeneity. This work also successfully replicated Wolff and Reed’s findings on the negative impact of immobile resources exposure on parent-firm performance. Wolff and Reed’s results on resource complementarity were, however, not successfully replicated.
Originality/value
This replication study goes beyond simply showing that engaging in a joint venture strategy creates value for parent-firms. Through the use of a new content analysis method, this study was able to provide strong support for Wolff and Reed’s theory on the performance gains provided by resource heterogeneity in a joint venture setting, and to confirm the results on potential adverse performance effects of immobile resources exposure.
Keywords
Acknowledgements
The author would like to thank Dr Susan F. Storrud-Barnes and Dr Richard Reed for the helpful comments and suggestions throughout the development of this replication study.
Citation
Jancenelle, V.E. (2015), "The relationship between firm resources and joint ventures: revisited", American Journal of Business, Vol. 30 No. 1, pp. 8-21. https://doi.org/10.1108/AJB-07-2014-0045
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited