Match-Making in International Joint Ventures in Emerging Economies: Aligning Asymmetric Financial Strength and Equity Stake

Pierre-Xavier Meschi (), Anne Norheim-Hansen and Edson Luiz Riccio
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Pierre-Xavier Meschi: IAE Aix-en-Provence (CERGAM, Aix-Marseille Université) and SKEMA Business School
Anne Norheim-Hansen: KEDGE Business School
Edson Luiz Riccio: Universidade de São Paulo USP

Management International Review, 2017, vol. 57, issue 3, No 4, 440 pages

Abstract: Abstract This paper attends to prior equivocal results concerning partner asymmetry and international joint venture (IJV) performance. More specifically, we examine how asymmetric financial strength between the partners influences IJV termination in emerging economies, and consider the asymmetry direction as well as the local partner’s equity stake as contingency factors. Our event history analysis of 119 IJVs formed in Brazil shows that asymmetric financial strength increases the likelihood of termination. However, notably, the findings reveal that higher local partner financial strength is less harmful to IJV performance than lower local partner financial strength. Moreover, under both conditions, IJV performance is better when the highest equity stake is attributed to the local partner.

Keywords: International joint ventures; Event history method; Social exchange theory; Partner asymmetry; Brazil (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11575-016-0285-8

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