How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?

Xuan Bai, Jeanine Chang () and Julie Juan Li
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Xuan Bai: Southwestern University of Finance and Economics
Jeanine Chang: Deakin University
Julie Juan Li: City University of Hong Kong

Management International Review, 2019, vol. 59, issue 3, No 3, 387-412

Abstract: Abstract Legitimacy has been identified as an important factor influencing the survival of international joint ventures (IJVs). Yet empirical studies exploring IJV strategies for gaining post-formation legitimacy are scarce. This study examines how IJVs accumulate legitimacy after their formation in China. We identify two non-market strategies, namely corporate social responsibility (CSR) and political ties, and compare their effects on gaining two types of legitimacy: political legitimacy and market legitimacy. Data obtained from senior and middle IJV managers in China lends empirical support for the direct effects of CSR and political ties on IJV legitimacy-building. Surprisingly, we find that CSR has a stronger effect on gaining both political and market legitimacy than political ties. Furthermore, both political and market legitimacy contribute to IJVs’ performance.

Keywords: Corporate social responsibility; Political ties; Political legitimacy; Market legitimacy (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (22)

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DOI: 10.1007/s11575-019-00382-x

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