Partnering strategies and performance of SMEs' international joint ventures |
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| Institution: | 1. Lee Kong Chian School of Business, Singapore Management University, 469 Bukit Timah Road, Singapore 259756, Singapore;2. Asian Management Institute, Richard Ivey School of Business, University of Western Ontario, London, ON, Canada N6A 3K7;1. Department of Economics, Portland State University, Portland, OR, USA;2. School of Public Policy, Pepperdine University, Malibu, CA, USA;3. Department of Economics, Texas Christian University, Fort Worth, TX, USA;1. Management Department, Strome College of Business, Old Dominion University, 2038 Constant Hall, Norfolk, VA 23529, United States;2. Department of Management and International Business, Merrick School of Business, University of Baltimore, Baltimore, MD 21201, United States;1. ESCE, International Business School, 10 rue Sextius Michel, 75015 Paris, France;2. IAE Lyon, Magellan Research Centre, Jean Moulin Lyon 3 University, 6 cours Albert Thomas, BP 8242, 69355 Lyon Cedex 08, France;1. CERGAM, IAE Aix-en-Provence, Aix-Marseille Université & SKEMA Business School, Chemin de la Quille, Puyricard, 13 540 Aix-en-Provence, France;2. HaiDuong University, Le Thanh Nghi Street, HaiDuong City, Viet Nam;3. EMLYON Business School, Strategy and Organization Department, 23 Avenue Guy de Collongue, 69 134 Ecully Cedex, France;1. University of Kent, Kent Business School, Canterbury CT2 7PE, UK;2. Bradford University School of Management, Emm Lane, Bradford BD9 4JL, UK;3. Queen''s University, Smith School of Business, 143 Union Street, Kingston, Ontario, Canada K7L 3N6 |
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| Abstract: | 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. |
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