Knowledge complementarity,knowledge absorption effectiveness,and new product performance: The exploration of international joint ventures in China

Firms use international joint ventures (IJVs) to access and learn from partners’ knowledge and thus enhance their new product performance, especially when the partners have complementary knowledge bases. Most of the existing literature assumes that knowledge complementarity can directly lead to enhanced new product performance, while ignoring the mediating role of knowledge absorption effectiveness and moderating effects of organizational structure and organizational culture to integrate and manage knowledge complementarity. Using dyadic data from 119 IJVs in China, this article suggests that knowledge complementarity influences IJV new product performance through the full mediation of knowledge absorption effectiveness. Also, the results suggest that an IJV's departmentalization of organizational structure significantly hurts the effect of knowledge complementarity on knowledge absorption effectiveness, while a strong learning culture of the IJV can significantly enhance such effects.     

What changes the rules of the game in wholly owned subsidiaries? Determinants of knowledge acquisition from parent firms

We examine key factors affecting the extent of knowledge acquisition from multinational enterprises (MNEs) in their wholly owned subsidiaries (WOSs). As the volume of foreign direct investment (FDI) by MNEs is rapidly growing, empirical studies dealing with knowledge acquisition from parent firms in subsidiaries are in the limelight. However, as far as we know, none has attempted to identify primary mechanisms influencing subsidiary learning by dividing WOSs based on ‘investment mode’ and ‘investment direction’. We believe WOSs are characterized by these two issues and thus this research contributes to current literature by providing a detailed picture of learning mechanisms in subsidiaries. We advance a series of propositions to achieve the research objective by using a sample of WOSs established by MNEs in Korea. By doing this, we reveal that subsidiary learning depends significantly on absorptive capacity in learning organizations, relational capital and parent firms’ behavior. Also, we confirm that factors facilitating knowledge acquisition are influenced by investment mode and investment direction. Based on the results, this study provides some useful implications for MNEs and policy makers in local markets.     

Knowledge acquisition from foreign parents in international joint ventures: An empirical study in Vietnam

Drawing on alliance learning and absorptive capacity literatures, we propose a model-linking absorptive capacity, knowledge acquisition, and performance. The model is tested in a sample of 173 international joint ventures (IJVs) in Vietnam. The results show that all three components of absorptive capacity contributed substantially to the level of knowledge acquisition reported by IJVs. Critical factors predicting knowledge acquisition included investment in training, employees’ ability to learn, and joint participation. Knowledge acquisition, especially the acquisition of tacit knowledge, was found to contribute significantly to IJV performance. Our model generally supports existing theories regarding the relationship between absorptive capacity and knowledge acquisition, as well as between knowledge acquisition and performance.     

Disseminative capacity and knowledge acquisition from foreign partners in international joint ventures

We developed a theoretical model that examines the impacts of a foreign parent’s disseminative capacity on knowledge transfer to International Joint Ventures (IJVs). We tested our model with data from 199 IJVs in South Korea. We found empirical support for our arguments that the foreign parent firm’s codification and articulation ability, willingness to share knowledge, and frequent and effective use of communication channels determined the extent of knowledge acquisition by the local IJV partners.     

Control,innovation and international joint venture performance: The moderating role of internal and external environments

This study aims to analyze how parent control strategies affect the degree of innovation in international joint ventures (IJVs) and how different types of innovation strategies - divided into radical and incremental innovation strategies - influence the performance of IJVs. This study uses the most widely adopted definition and operationalization of control in IJVs by Geringer and Hebert (1989), including the three dimensions: mechanisms, focus, and extent of control. These relationships are further analyzed by integrating internal and external moderating factors and their connections with IJV performance. Our theoretical analysis proposes that various control strategies differently influence an IJV’s innovation activities under various internal environmental moderating factors. These, in turn, differently influence the IJV performance. Furthermore, we suggest that the external environmental factors moderate the relationship between innovation strategies and performance of IJVs.     

中外合资企业控制权分配与绩效关系的实证研究

合资企业契约的不完备性决定了控制问题是合资企业的核心问题,合理的控制权结构可以帮助合资企业的母公司实现自己的战略目标,并且保持竞争优势。与之前研究不同的是,本文通过引入分割控制的概念,利用106家中外合资企业的数据对控制权分配与绩效之间的关系进行了实证检验。研究发现,合资企业的中方只对某些经营活动进行控制的分割控制,最有利于合资企业的中方实现战略意图。     

Managerial and Organizational Learning in Chinese Firms

This investigation has thrown light on ways in which international joint ventures (IJVs) are addressing the issues of balance between the need to learn the knowledge and management practices introduced by the other partners and the need for the partners to maintain that level of control which enables them to secure appropriate returns from their equity investment. The results from the investigation of 67 IJVs show equity can be used as an appropriate indicator for examining both the process and the outcome of learning embedded in the organization. They also suggest that the control leveraged from a majority equity share can be used to safeguard knowledge and competencies whilst simultaneously responding to the necessity to incorporate the knowledge and management practices of its partner. Learning achieved in an IJV may not necessarily relate only to the control mechanisms exercised as there are many other variables that may have an impact including attitudes, cultural capital building, or even government policy. This study thus highlights the relationship between the impact derived from the ways of committing the resources onto an IJV and its contribution to the learning achieved in an IJV.     

Knowledge creation capability in MNC subsidiaries: Examining the roles of global and local knowledge inflows and subsidiary knowledge stocks

Grounded in knowledge-based theories of the multinational corporation (MNC) and building on organizational learning literature, this paper develops and tests a model of MNC subsidiaries’ knowledge creation capability as a joint function of knowledge inflows to subsidiaries and their knowledge stocks (i.e., subsidiaries’ internal human, social, and organizational capital). Survey-based data from 106 subsidiaries located in the U.S. suggests that local (i.e., host country) knowledge inflows to a subsidiary are more effective in enhancing a subsidiary's knowledge creation capability compared to global knowledge inflows from other units of the same MNC. Furthermore, results point to a not-invented-here syndrome in the exploitation of knowledge sourced from the parent company; such that when a subsidiary's internal social capital is high, the relationship between global knowledge inflows and knowledge creation capability is negative and when it is low, the relationship becomes positive.     

Control mechanisms of MNEs and absorption of foreign technology in cross-border acquisitions

This study investigates the impact of control mechanisms exercised by MNEs on knowledge (technology) absorption in cross-border acquisitions (CBAs). The empirical examination was undertaken in Korea, which is a newly industrialized emerging market, where knowledge acquisition from foreign investing firms is particularly important to leapfrog into advanced economies. We find that most of the control mechanisms (i.e., ‘staffing the top management positions’, ‘participation in the policy making and planning process’, ‘interaction of the subsidiary's top management with the MNE’ and ‘participation of foreign expatriates in key functional areas’) have a positive association with organizational learning. In addition, we also uncover that provision of training programs for a fixed period creates more synergy when it is combined with constant and continuous education in daily activities. This study contributes significantly to the body of control mechanism literature and the understanding of CBAs, and also provides practical implications for MNEs intending to enter foreign markets by partially purchasing the equity shares of local firms.     

Foreign direct investment motivations and knowledge acquisition from MNEs in overseas subsidiaries

Despite studies exploring factors affecting knowledge acquisition from multinational enterprises in subsidiaries, what accounts for a successful acquisition is unresolved. We argue that such disparity may stem from inattention to investment motivations of multinational enterprises (MNEs) in foreign markets and to the fact that learning patterns of subsidiaries can be influenced by foreign firms' market‐seeking or efficiency‐seeking behaviors. We find that absorptive capacity in learning organizations and daily interactions with knowledge possessors are essential to learning from parent firms. In addition, active support from parent firms is particularly crucial for subsidiaries seeking to improve operational efficiency of MNEs. We also suggest that potential absorptive capacity plays a catalyst role in initiating knowledge acquisition, particularly in cases where MNEs have market‐seeking motivations. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

Microfoundations for learning within international joint ventures

IJV research highlights the importance of learning in international joint ventures (IJVs) but has not indicated how to achieve it. We combine organizational learning and internationalization process research within a microfoundations framework to understand learning in IJVs. We study a Samsung–Tesco IJV that successfully learned retail practice from one partner and applied it in a South Korean context known by the other. The managers used many learning processes, not just experiential learning emphasized in international business research, and used many more knowledge sources than assumed in prior research, including the IJV partners’ other subsidiaries. To build absorptive capacity, IJVs need appropriate microfoundations at individual, process and structural levels, and coherent interlinkages between them, especially by having IJV managers’ with extensive experience and orientation to learn who are given structural and process autonomy to invest in learning.     

Partnering strategies and performance of SMEs' international joint ventures

The international joint venture (IJV) is an important mode in the internationalization of small- and medium-sized enterprises (SMEs). Internationalization in turn is an entrepreneurial behavior in the pursuit of growth. Partnering strategies in the formation of IJVs can have significant effects on the outcome of SMEs' international expansion. In this study, we examine the performance implications of two types of resources contributed by SMEs' IJV partners, host country knowledge and size-based resources. We develop and test three sets of hypotheses about the longevity and financial performance of a sample of 1117 international joint ventures established in 43 countries by 614 Japanese SMEs that have fewer than 500 employees. Our findings indicate that SMEs' IJVs with local partner(s) may be associated with decreases in longevity, especially when SMEs acquire host country knowledge. The host country experience of Japanese partner(s) does not have any direct effects on IJV profitability but reduces the longevity of IJVs. Finally, the size of Japanese partner(s) increases the longevity of IJVs but may have negative effects on IJV profitability when large Japanese partners have low equity ownership in IJVs. Our findings highlight the differential effects that IJV partners' experience-based and size-based resources have on IJV performance. Our findings also demonstrate that the same strategy could have different effects on different dimensions of performance.     

Managing international joint ventures to improve performance: The role of structural and social mechanisms

Poor performance has been a major concern in research on international joint ventures (IJVs). This study integrates the IJV management mechanisms from transaction cost theory (TCT) and social exchange theory (SET) in order to gain insights into management mechanisms that improve IJV performance. The framework consists of three structural (i.e., symmetric dependence, symmetric equity share and resource complementarity) and three social (i.e., trust, communication and cultural adaptation) IJV management mechanisms, which are considered as potential determinants of IJV performance. Based on the analysis of data collected from 89 IJVs established by Nordic firms in Asia, Europe and the USA, results indicate that TCT-based symmetric dependence and resource complementarity on the one hand and SET-based trust, communication and cultural adaptation on another significantly improve IJV performance. However, impact of symmetric equity share on IJV performance remains negative and non-significant, explaining that IJV partners may consider it rather a safeguard to their own stake and interests in IJVs. In addition, SET-based IJV management mechanisms are found to be more effective than the TCT-based IJV mechanisms in improving IJV performance.     

Achieving value co-creation through cooperation in international joint ventures: A two-level perspective

How can international joint ventures (IJVs) enhance value co-creation? Using a resource-based view (RBV), this study examines whether partners’ cultural compatibility and parent companies’ asset complementarity foster top-level cooperation and/or operating-level cooperation in IJVs and investigates the underlying mechanisms (i.e., top-level goal alignment and operating-level goal alignment) in IJV relationships. This study also scrutinizes the differing impacts of top-level and operating-level cooperation on value co-creation in IJVs. The findings from a survey of 200 IJVs in China show that partners’ cultural compatibility positively affects top-level cooperation primarily through top-level goal alignment, while asset complementarity positively affects operating-level cooperation through operating-level goal alignment. Furthermore, operating-level cooperation has a stronger effect on value co-creation than top-level cooperation. This study offers fresh insights into IJV cooperation and value co-creation by introducing a two-level perspective and provides important managerial implications for the development of sustainable IJVs.     

The relationship between learning conditions in the workplace and informal learning outcomes: a study among police inspectors

Informal workplace learning has become a prominent reality in the knowledge society of today. For this reason, developing appropriate learning conditions in order to enhance workplace learning is dominating organizational agendas. However, research that investigates the relationship between important learning conditions and learning outcomes resulting from informal learning is scarce. Therefore, the main purpose of this study is to explore how learning conditions in the workplace are related to these informal learning outcomes of police inspectors in particular. A mixed method study, including a survey among 390 police inspectors and interviews with nine police inspectors, was set up to explore this relation. Overall, the results of the survey study suggest that the learning conditions ‘information’, ‘feedback’, ‘reflection’ and ‘coaching’ are good predictors for the acquisition of ‘generic learning outcomes’ and ‘organizational level learning outcomes’. The learning condition ‘coaching’ is also strongly associated with ‘job‐specific learning outcomes’. These results are in accordance with the perception of the interviewed police inspectors.     

The effects of educational delivery methods on knowledge retention

In today's dynamic learning environment, educational delivery methods have become increasingly diverse. Using a unique opportunity to assess three types of course delivery—face-to-face, interactive television (iTV), and purely online delivery—the authors look at both initial knowledge acquisition and the retention of this knowledge. The results indicate that the online class outperformed the face-to-face and iTV sections on the initial performance evaluation; however, knowledge retention was greater in the face-to-face and iTV sections. The authors' findings suggest that diverse educational delivery methods provide unique benefits to students, but these benefits vary in relation to immediate learning outcomes and knowledge retention.     

How long will the marriage of Sino-Foreign JVs in China last? A theoretical and empirical investigation

This paper studies the factors affecting the longevity of international joint ventures (IJVs) in China and investigates the strategic interactions of the players in an IJV (foreign parent, local parent and IJV management) by adopting game theory and using empirical analysis based on national perceptions of time horizons. The theoretical part shows equilibria for the games played by the parents. The empirical evidence, based on a sample of Chinese-US and EU IJVs, as well as Chinese-Japanese and South Korean IJVs, is consistent with the propositions derived from our theoretical models. Our empirical findings show that the longevity of an IJV is affected by senior management control. Access to local knowledge is also a crucial factor affecting longevity. Furthermore, the degree of long-term orientation (LTO) of the parents influences the longevity of Sino-Foreign IJVs. The contributions made by both foreign and local parent firms are also found to influence the longevity.     

Knowledge Recipients,Acquisition Mechanisms,and Knowledge Transfer at Japanese Subsidiaries: An Empirical Study in China

Although knowledge transfer contributes to a firm's competitive advantage, the effect of mechanisms used by a knowledge recipient on knowledge acquisition has been understudied. This article provides some insights on the interplay of knowledge recipients and transfer mechanisms between Japanese multinational corporations and their subsidiaries operating in China. Using structural equation methodology, this research proposes a knowledge transfer model that captures knowledge recipients’ characteristics and acquisition mechanisms, and empirically investigates the impact of knowledge recipients on mechanisms to test the applicability of specific mechanisms in knowledge acquisition. This article argues that knowledge recipients’ motivation and absorptive capacity have a positive impact on knowledge acquisition, and simultaneously provides evidence that mechanisms have mediating effects, which are vital to our understanding of knowledge transfer effectiveness. This study extends our understanding by adding knowledge transfer mechanisms as mediating factors in the relationship between knowledge recipients’ characteristics and knowledge acquisition, and quantifying the relationship. © 2015 Wiley Periodicals, Inc.     

A multiple constituency approach to IJV performance measurement

This paper analyses the differences in the way partner firms assess the performance of international joint ventures (IJV). It is argued that an understanding of these differences is important for the practice of, and for research into IJV management. From a managerial point of view, firms, as well as IJV management, need to know how the partners evaluate the venture's performance. From a research perspective such differences can distort the results of studies that compare the performance of IJVs with other organizational designs or aim to identify the determinants of IJV performance. A multiple constituency approach is employed to develop hypotheses and test them using empirical data gathered through a questionnaire survey among 110 managers of German–Chinese joint ventures (GCJV) in the People's Republic of China. This is supplemented by qualitative data gathered through in-depth interviews with 25 managers. The findings highlight a number of differences regarding the way in which partner firms assess the performance of IJVs that are relevant for practice and research.     

Dyadic specific investments,absorptive capacity,and manufacturers' market knowledge acquisition: Evidence from manufacturer–distributor dyads

How do manufacturers acquire market knowledge through their partnerships with distributors? This study sheds light on this interesting question by investigating how specific investments (SIs) from both manufacturers and their distribution partners affect the manufacturers' learning about market demands and trends. Using paired-data collected from 225 manufacturer–distributor dyads in China, we find that the SIs of manufacturers and distributors both independently and interactively enhance manufacturers' acquisition of market knowledge from their distributors. In addition, manufacturers' absorptive capacity positively moderates the effect of SIs on manufacturers' learning from distributors.