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The authors combine options logic with transaction cost economics to explain why firms maintain, divest or buy out their international joint ventures (IJVs). It is suggested that a decline in environmental risk and higher partner-related risk makes a firm more likely to acquire an IJV but less likely to divest an IJV. The study also investigates how IJV age moderates the effects of a decline in environmental risk and higher partner-related risk.

The study employs competing risks analyses to examine the drivers of different termination outcomes using a dataset consisting of 459 IJVs in the People's Republic of China, of which 110 were either acquired or divested by their foreign parent.

The study finds that changes in environmental risk and partner-related risk affect how firms terminate their IJVs in the People's Republic of China. Specifically, the authors find that the effect of exogenous and endogenous risk are more pronounced for the acquisition of IJVs than for the divestment of IJVs.

The study contributes to international marketing research by complementing options logic with transaction cost economics to provide a theoretical explanation of the different ways in which IJVs in the People's Republic of China are terminated.

IJVs continue to be an important yet often unstable method to serve international markets. Our findings increase managers' awareness of the effect that two important sources of risk may have on the termination of IJVs in the People's Republic of China.

The study provides novel insights into the effect that changes in exogenous and endogenous risk have on a firm's choice of termination mode drawing on novel data on the different ways in which foreign firms have terminated their IJVs in the Peoples' Republic of China.

The purpose of this paper is to analyse investment strategies and performance of Finnish firms in their international joint ventures (IJVs) established in Baltic States.

The paper analyse performance of IJVs in Baltic States based on the IJV theory, international business literature, and foreign direct investments in Central and Eastern Europe (CEE) literature. The analysed factors include firm, investment, and inter-partner relationship-specific factors. To examine the propositions the paper used ten IJVs established by Finnish firms in various Baltic States between the period 1991 and 2005.

The results show that the level of uncertainties in the countries and the differences between partners are not related to firms’ commitments and the entry mode choice. Several Finnish firms preferred cost leadership to compete with other firms in the local markets. In most cases there was a positive relationship between the level of partners’ equity share, commitment to the IJV, and the level of trust between partners. The results indicated differences in the IJV performance depending on parent firms’ objectives, their competitive strategies, mode of entry, age of IJVs, control strategies, level of trust, and commitment between partners, as well as depending on the performance measures used.

This study suggests four observations that managers may need to take into consideration to improve IJV performance in the Baltic States. First, cost leadership strategy help to increase IJV performance in terms of sales. Second, social control mechanisms and narrow control leaded to better performance than formal and wide control. Third, minority ownership by Finnish firms in IJVs leaded to better performance based on sales, productivity and total performance whereas majority ownership had leaded to better performance in terms of total costs. Finally, the results confirmed that commitment to the IJV operation and trust on the other partner are very essential factors to IJV performance.

The study is the first one to analyse in more detail based on several cases the IJV strategies and performance of Finnish firms in the Baltic States. The analysed factors include several such factors which have not been analysed related to IJV operations in Baltic States (some also limitedly in the CEE context).

The purpose of this paper is to develop and test a theoretical model to examine how exchange climate attributes and contextual factors between two parent firms in an international joint venture (IJV) affect tacit knowledge transfer. The authors investigate how this tacit knowledge, which comprises international marketing expertise, knowledge about foreign cultures and tastes and managerial practices, impacts IJV performance.

Based on data from a survey of IJV managers in 326 Korean firms from a variety of industries, structural equation modeling (AMOS 18.0) is used to test the authors’ hypotheses.

The findings show that conflict resolution and cooperation positively affect tacit knowledge transfer, but communication does not. It was found that the difference in the relative levels of economic development in the environments of partners significantly influences tacit knowledge acquisition, but cultural distance does not. Tacit knowledge acquisition positively influences IJV performance.

The paper fills a gap in the literature by articulating the relationships between exchange climate attributes and tacit knowledge acquisition. Exchange climate, characterized by behavioral processes that directly impact knowledge transfer, constitutes an important missing link in prior research about tacit knowledge transfer. The paper contributes to a better understanding of the dynamic relationships among relational capital, exchange climate and tacit knowledge transfers. The model the authors develop and test has important implications for the design of organizational processes that facilitate tacit knowledge transfer.

The characteristics of a particular organizational culture may affect performance in achieving the objectives of international joint ventures (IJVs), a type of partnership that is often used in international business relations between developed and emerging countries. The purpose of this paper is to analyse whether the underlying dimensions that characterize organizational culture in these countries may affect firms’ performance, specifically their competitiveness, effectiveness and efficiency.

The survey conducted for this study was addressed to Spanish-Moroccan IJVs trading in Morocco. The research hypotheses were tested using multivariate analysis techniques (exploratory factor analysis and linear regression model).

Based on information provided by the CEOs of Spanish-Moroccan IJVs between small- to medium-sized firms, the present study shows that levels of competitiveness, effectiveness and/or efficiency in these organizations are influenced by the involvement of staff in management, the degree of centralization of decision taking and the firms’ emphasis on results or on procedures.

This research contributes to the knowledge of the main factors related to the organizational culture of joint ventures that influence competitiveness, effectiveness and efficiency achieved.

The value provided by this research lies in the sample examined, in its focus on a very common type of partnership between SMEs, which has been little studied previously, and in the fact that the results obtained are extensible to other realities, such as partnerships between European companies and those from countries with similar characteristics (located in Africa or in countries where an Arab culture prevails).

This study aims to investigate the relationship between trust and performance in international joint ventures (IJVs) with the moderating effects of the structural mechanisms from transaction cost approach.

Using web-survey, data are collected from 89 IJVs of Northern European firms in Asia, Europe and America. Empirical data are analyzed with structural equation modeling and estimates moderating effects of symmetric dependence, symmetric equity share and resource complementarity.

The findings offer some interesting insights for transaction cost and the social exchange theory. This study demonstrates that a symmetric equity share between IJV partners does not moderate the trust–performance relationship, while a symmetric dependence and resource complementarity between partners effect positively. Therefore, trust takes on greater importance in enhancing IJV performance under symmetric dependence and resource complementarity and symmetric equity share between IJV partners deprecates the importance of equity distribution.

A symmetric dependence prevents the deceit from either partner in trusting relationships. Further, a trustful relationship enhances IJV performance regardless of the equity share in IJVs. IJVs with asymmetric equity share can also be successful, provided that IJV partners develop inter-partner trust.

The extant research has not examined how the trust–performance relationship is contingent on structural mechanisms of IJVs that transaction cost economics deem necessary to prevent opportunistic behavior. Three structural mechanisms of symmetric dependence, symmetric equity share and resource complementarity moderate the trust–performance relationship in IJVs.

The study purports at investigating the effect of organizational factors (strategy, culture, information technology and structure) on knowledge transfer and innovation performance in the context of Indian International joint ventures (IJVs) of varied ages and industries. All the variables are woven together in the framework of dynamic capabilities theory.

PLS-SEM was used to analyze the primary data collected from IJVs. The disjoint two-stage approach was applied to check the mediation in the model. The multigroup technique was deployed to test group-differences in the sample.

The four organizational factors, combined as a construct, are seen to have a positive impact on knowledge transfer, which facilitates innovation performance. But mediation analysis revealed the insignificant indirect relationship of organizational factors with innovation through knowledge transfer for the total sample. In-depth group analysis revealed that these results differ between young and mature IJVs and knowledge-intensive and non-knowledge intensive industries.

The number of organizational factors is limited to four, which can be further increased. Longitudinal studies for investigating the formation of dynamic capabilities can be the future research direction.

The research has provided hierarchical analysis for organizational factors, knowledge transfer and innovation performance with multigroup industrial and age-wise analysis of Indian IJVs, which is still unplumbed in international business literature.

The purpose of this paper is to advance a theoretical framework that incorporates the relationship between market challenge and learning and customer orientations, and the influence of these orientations on innovativeness in an international joint venture (IJV) context.

The authors estimate a structural equation model utilizing survey data collected from 199 IJVs in the Republic of Korea.

The authors found that while market challenge does not influence learning orientation in IJVs, it does have a significant positive influence on customer orientation. Further, the authors’ findings support that both learning orientation and customer orientation have positive impacts on IJV innovativeness. Another interesting finding shows that the impact of learning orientation on IJV innovativeness is significant only when IJVs have high levels of interaction with parent firms. The study also reveals that having a strong learning orientation amplifies the impact of customer orientation on innovativeness in IJVs.

Despite increased interest in IJVs, there has been relatively little work linking IJV innovativeness with learning and customer orientations. The study contributes to recent streams of research that seek to understand the role of these orientations in IJV innovativeness.

International joint ventures (IJV) management teams exhibit organizational commitment to multiple organizations: to the IJV, to the domestic parent, and to the foreign parent. Conflicting loyalties occur when there is an unbalanced commitment to these entities. An empirical study found that almost one third of the IJV managers sampled perceived conflicting loyalties in the IJV management team. The negative consequences of conflicting loyalties are discussed, and suggestions are offered for mitigating their effects.

The purpose of this paper is to generate an observable relationship between five control mechanisms used by parent firms to direct international joint ventures (IJVs) with three distinct performance measurements. By observing relationships with different performance measures it serves to enhance the debate on IJV creation and control functions.

This paper looks at IJVs and analyzes the application of control mechanisms through a survey of IJVs in South Korea, then a further review of the different performance measurements is provided to expound upon the increasing reasons of IJV creation.

The paper determines different impacts upon performance measures through the use of either personnel or policy measures. Parents' use of personnel shows a direct relationship with satisfaction levels of IJV performance, while policy measures show significant relationships to both financial and growth measurements. The paper finds that through the use of multiple performance measurements there is a greater understanding of the implications of control of different aspects of an IJV.

The paper is concentrated solely on IJVs in South Korea; and further, measurements based on perception are consistently subject to accuracy concerns in statistical analysis.

IJVs are set up with different goals. Utilizing control mechanisms that enhance the performance goal of a parent can provide support during the creation and negotiation process.

The value provided by this paper is the critical analysis of control mechanisms on more than one performance measurement and a quantifiable statistical analysis that shows significant impact of certain mechanisms.

The aim of this study is, first, to explore the moderating effects of parent control on the strategic objectives of foreign firms entering international joint ventures (IJVs) and, second, to assess performance in relation to these objectives.

The study integrates three major theoretical streams in the IJV field to investigate the rationale for the formation of IJVs. The primary data collection method was a web‐based survey. The ability to collect large amounts of data without interviewers, stationery or postage, makes the cost of doing web surveys very attractive. Sino‐European manufacturing IJVs (in industries such as machinery, textiles, and electronics) were investigated.

The strong empirical evidence in this study confirms the significant moderating effects of parent control on attainment of strategic objectives, suggesting that different strategic objectives of foreign partners have different performance outcomes based on the degree of control exercised by the partner and the focus on different IJV activities. The findings also indicate that market‐developing and knowledge‐acquiring objectives outperform efficiency‐seeking objectives.

The purpose of this study was to examine satisfaction with performance from the point of view of the foreign IJV partner. Hence, data were collected from foreign senior management who represent foreign partners. Second, the single IJV host country context (China) inevitably raises the question as to whether the findings from this study can be generalised to IJVs in other emerging markets. Third, the relatively small sample size (61 IJVs), although comparable with previous studies, limits the use of more powerful statistical tools.

The findings of this study suggest that parent companies should formulate different control structures according to different strategic objectives. Second, and rather interestingly, different categories of objectives perform differently in joint ventures. It seems, for example, that, in joint ventures with Chinese partners, European multinational enterprises achieve better results in relation to market development and knowledge acquisition than when seeking organisational efficiency.

Prior research has tended to examine the IJV phenomenon from a single theoretical perspective. This study attempts to integrate three major theoretical streams in the IJV field to investigate the rationale for the formation of IJVs. As such, it potentially offers more comprehensive explanatory power. A further innovation is related to the use of a web‐based survey rather than the traditional mail survey.