Causal attribution for peer performance and international joint venture divestment

Kent N. Hui, G. Tomas M. Hult and David J. Ketchen

Journal of International Management, 2020, vol. 26, issue 2

Abstract: We theorize that compared to peers' consistent subsidiary performance (i.e., negative subsidiary performance of unsuccessful peers and positive subsidiary performance of successful peers), firms are more likely to attribute peers' inconsistent subsidiary performance (i.e., negative subsidiary performance of successful peers and positive subsidiary performance of unsuccessful peers) to external factors that would also influence their own international joint venture (IJV) in the same market. As a result, peers' inconsistent subsidiary performance is more likely to make the observing firms adjust the expected prospects of their own IJV, thereby changing the likelihood of divestment. We also examine the boundary conditions for the effects of peers' inconsistent subsidiary performance, namely the stability of the external environment and the presence of local partner(s) in the focal IJV. Analysis of 460 Japanese IJVs established from 1996 to 2015 provides support for the importance of causal attribution in learning from peer performance.

Keywords: Organizational learning; Outcome-based learning; International joint venture; Causal attribution; Divestment (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.intman.2020.100754

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