Joint venture longevity in Southern and Eastern Mediterranean countries

Dora Triki (), Emna Moalla and Ulrike Mayrhofer ()
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Dora Triki: ESCE, International Business School - ESCE
Ulrike Mayrhofer: MAGELLAN - Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon

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Abstract: Companies from mature economies have considerably developed their investments in emerging markets in the recent period. These investments frequently take the form of international joint ventures (IJVs) signed with local partners. This trend also concerns Southern and Eastern Mediterranean (SEMED) countries where foreign investors often establish joint ventures to develop their growth strategies. This chapter focuses on the longevity of IJVs in SEMED countries: Algeria, Tunisia, Morocco, Israel, Egypt, Syria, Lebanon, and Turkey. The authors test the impact of two factors that are likely to influence IJV longevity in emerging markets: country risk and level of economic development. The empirical study is based on a sample of 124 international joint ventures observed between 1996 and 2010. Country risk is measured by Euromoney's country risk rating, and the level of economic development by the World Bank's classification concerning national income per capita. The statistical analysis shows that the level of economic development in the host country has a significant impact, whereas country risk does not influence IJV longevity. The obtained findings highlight the importance of economic factors for IJV longevity in the SEMED region.

Keywords: Internationalization; joint ventures; longevity; country risk; level of economic development; Mediterranean region. (search for similar items in EconPapers)
Date: 2017
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Published in Svetla Marinova, Jorma Larimo and Niina Nummela. Value Creation in International Business : An MNC Perspective, Volume 1, Palgrave Macmillan, p. 55-74 2017

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01403416

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