Understanding performance of joint ventures: Modeling the interactional strength of fit between partners

Abstract

Purpose

The purpose of this paper is to contribute to the existing knowledge about joint ventures (JV) by modeling the interactional strength of fit between JV partners. The paper integrates different constructs from three theoretical perspectives most widely used in JV studies – trust and commitment from the relational perspective; opportunism and specific investments from the transaction cost perspective; and assesses the moderating role of fit from the contingency perspective.

Design/methodology/approach

Quantitative data from JVs were collected using the survey method. Relationships in the moderated mediation model were tested using complex sets of hierarchical regression steps.

Findings

Relational intentions of partners influence specific investments between the partners. The two together drive JV performance and their impact is moderated by the extent of fit between the partners. Thus, it is concluded that the strength of fit, as perceived by partners, influences the role of other constructs from the relational, transactional and contingency perspectives, which together can help us understand performance of JVs better.

Research limitations/implications

An assessment of longitudinal view of the relational variables and subsequent performance can be captured in future. This research assesses fit based on compatibility, which assesses similarity as well as complementarity, primarily by way of harmony in different aspects. Future research could differentiate complementarity from similarity to further assess the impact of fit.

Practical implications

The relational behavior of JV partners, or their rational approaches to resource seeking, will be optimally effective only when the fit between partner characteristics is high. While the relational or transactional approaches can evolve in JVs, the partners should assess the extent of fit before getting into a JV relationship.

Originality/value

The research presents a holistic framework that draws from various theoretical perspectives. The results establish that contrary to its peripheral treatment in the literature, fit plays an important role and can modify the influence relational variables and specific investments can have on the performance of JVs.

Citation

D. Vivek, S. and Glenn Richey, R. (2013), "Understanding performance of joint ventures: Modeling the interactional strength of fit between partners", The International Journal of Logistics Management, Vol. 24 No. 3, pp. 356-379. https://doi.org/10.1108/IJLM-10-2012-0109