Determinants of IJV performance using alternate indicators of performance

Raji Rajan ()
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Raji Rajan: Department of Economics, University of Reading

No em-dp2004-16, Economics Discussion Papers from Department of Economics, University of Reading

Abstract: In this paper, we look at the factors determining IJV performance in a developing country. In doing so, the paper lays emphasis on two other aspects of performance: firstly the measure of performance and secondly the perspective from which it is evaluated. Our analysis draws on the results of a primary survey of 56 Indo-British IJVs in India. By extending our survey to include both partners involved in an IJV, the paper presents a framework which incorporates the perspectives of both the host and the foreign partner involved in the IJV. Several explanatory factors proved to be significant in understanding the performance of IJVs. Good partner relations, high degree of control and previous history of cooperation between the partners emerged as important determinants of the subjective indicator of performance. In the predictors of objective performance, dominance of the foreign partner in the initial years, an expectation of long-term as opposed to short-term financial gains, and the fulfilment of the motivation for minimising costs, all contributed positively to performance.

Keywords: International Joint Ventures; performance; Developing Countries (search for similar items in EconPapers)
Pages: 35 pages
Date: 2004
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