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.     

Creating sustainable international social ventures

International social ventures are now an increasingly common feature of the international business and social landscape in many countries worldwide. However, despite the increase in the number of social ventures and widespread interest that has resulted, theoretical development that deals specifically with international social ventures, or social ventures that operate across borders, has lagged behind, and there is little to guide potential social entrepreneurs thinking of setting up an international social venture. The aim of this article is to show how combining concepts from social exchange theory with international new venture theory can provide a useful conceptual framework that helps answer the central questions: What are the conditions for sustainable international social ventures? What difficulties are likely to arise in establishing such ventures? © 2012 Wiley Periodicals, Inc.     

Strategic ambidexterity and performance in international new ventures

We drew on the literature on ambidextrous organizations to propose that international new ventures (INVs) that concurrently pursue paradoxical pairs of strategies—known as the capability of strategic ambidexterity—can achieve superior performance. These paradoxical strategies are: (a) few investments and many countries, and (b) standardization and innovation. Our hypotheses were tested using data from 70 Canadian INVs. This is the first study that attempts to theoretically and empirically link ambidexterity and INV performance. Our findings suggest that INVs that are capable of pursuing and implementing paradoxical strategies achieve superior performance over those lacking such capability. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.     

Technology transfer and spillovers in international joint ventures

It is often argued that multinationals are reluctant to transfer technology due to the fear of spillovers. We show that this need not be the case if host country policies like taxation are taken into account. Furthermore, we examine the incentives the multinational and the host country have to engage in an international joint venture. We show why a multinational may agree to enter a joint venture even though this gives rise to spillovers. Surprisingly, we find that a joint venture is sometimes not in the interest of a host country, despite the prospect of spillovers.     

Endogenous international joint ventures and the environment

This paper examines the welfare effects of emission taxes under a choice between an international joint venture (JV) and a full-ownership FDI (Foreign Direct Investment) by parent firms from a developed country (the North) and a developing country (the South), as well as their location and share decisions. If the South has a poor abatement technology, its best policy is to impose a relatively high emission tax to attract a full-ownership FDI. If it has a good abatement technology, the best policy is to impose a relatively low emission tax to attract the JV. Furthermore, deregulation of foreign ownership of the JV improves the quality of the environment.     

Learning to manage international joint ventures

This paper identifies the key lessons of managing international joint ventures (IJVs) from the perspectives of IJV experienced partners and managers. The study adopts a multi-method personal interview and self-administered questionnaire approach to identify the major management lessons. Broadly, the response categories are grouped into three distinct areas of learning: (1) the management of the IJV formation process; (2) management of the boundary relationship between partners; and (3) the management of the operation of the IJV. The paper elucidates the lessons regarding these three areas of IJV management and provides a set of propositions for future research.     

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.     

Partner identification and selection of joint ventures in international retailing

Identifying and selecting the ‘right partner’ is one of the key topics in the international retailing literature. Yet, current research provides little knowledge of how international retailers find and select joint venture (JV) partners in foreign markets. We investigate seven cases of British retail multinationals to address this research gap. We find that some retailers initiate formalised partner searches. In other cases, however, JVs arise opportunistically, involving no planned partner identification and selection. Retailer selection criteria revolve significantly around local relationships and market knowledge, specifically concerning local real estate. At the same time, some retailers understand that to leverage these local resources, the relationship and strategic fit with partners are critical.     

The effect of early international commitment on international positional advantages in Spanish and Belgian international new ventures

Past research into internationalisation processes assumes that prior experience influences both a firm’s capability to absorb foreign market knowledge and its international competitiveness. However, recent international entrepreneurship research seems to suggest that an early international commitment can also contribute to develop competitive advantages. Further study of this relationship will provide a better understanding of the competitive behaviour of international new ventures. This paper focuses on how international new ventures acquire market knowledge from foreign markets and develop sustainable positional advantages there. The hypotheses derived from our model were tested using extended data gathered from samples of Spanish and Belgian new ventures. To support the validity of the scale content used, all the items were taken from a review of related literature. We attempted to ensure that they meet the conceptual definition and reflect all the relevant dimensions. We used confirmatory analysis to evaluate convergent validity. A structural equation model was used to test the research hypotheses. The results of the data analysis allow us to confirm that an early international commitment influences the positional advantages of international new ventures, since it facilitates the development of market orientation.     

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.     

Cultural bridging and the performance of international joint ventures

The existing predictions and findings regarding the effect of cultural distance on the performance of international joint ventures (IJVs) remain inconsistent. We suggest that this inconsistency is due to the lack of conceptually differentiating the cultural distance between the firm’s home country and its partner(s)’country (home-partner country cultural distance) from the cultural distance between the firm’s home country and the location of the IJV (home-host cultural distance). We contribute to our understanding of IJVs by explicitly differentiating these two types of cultural distance, and by introducing the concept of cultural bridging. Cultural bridging relates to the proportion of home-host cultural distance that is compensated by having a joint venture partner, whose home country culture is more similar to the host country culture than the MNE’s home country culture is to the host country culture. We theorize how cultural bridging affects IJV performance and how it interacts with home-partner country cultural distance and home-host cultural distance to influence IJV performance. We test our hypotheses using a sample of 1708 IJVs. We find that cultural bridging has a positive influence on IJV performance, strengthens the positive performance effect of home-host cultural distance, and reduces the negative performance effect of home-partner country cultural distance. Our findings help make sense of some of the inconsistent findings regarding the role that cultural distance plays for IJV performance.     

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.     

Learning in international new ventures: A systematic review

The present paper reports the findings of a systematic review on learning among International New Ventures (INVs). Learning has been studied fairly extensively by scholars in the field of organization theory. Learning is a prerequisite for internationalization, and the behavior of individuals working in INVs seems to indicate a strong predisposition or aptness to learning. In spite of this, research on learning among INVs has been limited and fragmented up to the present time. In seeking to advance the research niche of INV learning, we conducted a systematic review of articles published on learning within INVs. Our contributions are related to: (i) providing a review of current knowledge of learning among INVs; (ii) relating the findings of our review to the organizational learning theory proposed by March (1991); and (iii) a future research agenda.     

Organizational entrainment and international new ventures from emerging markets

Organizational entrainment captures the temporal fit in the activity cycles between exchange partners. We argue that organizational entrainment between international new ventures (INVs) and their most important international customers positively moderates the relationship between the degree, scope, and speed of internationalization and performance of INVs. We test our hypotheses on INVs from China, India and South Africa. The results support the contingent role of entrainment for degree and scope of internationalization but not for speed. Findings suggest that, when INVs attain temporal fit with their most important international customers, they can implement their strategic goals in international markets more effectively.     

Enriching strategic variety in new ventures through external knowledge

To build profitable market positions, new ventures have to address multiple challenges on several fronts. These ventures can compete by being simple (focused) or applying varied ways to compete. The likelihood of these ventures remaining competitive depends on their ability to build novelty into their products and operations, an activity that requires infusing knowledge into their operations. Most ventures, however, have limited knowledge bases and the reach (scope) of their external connections is limited, a factor that prompts them to tap into different external sources in their local areas. This article reports an empirical study of 140 new ventures located in seven regional clusters in Spain. The results show that new ventures can enrich the variety of their strategic repertoire by accessing diverse sources of external knowledge and being exposed to external novel knowledge, while absorptive capacity moderates this relationship. The degree of social development of these clusters also has a positive impact on the strategic variety of new ventures, exhibiting an inverted U-shape curve.     

Investment and control in international joint ventures: the case of China

In this study, we explore several factors affecting the amount of control that foreign companies have over their joint ventures in China. Managers working in sixty-seven international joint ventures were asked to report the share of equity held by the Chinese and foreign partners; the extent to which each partner had contributed important non-capital resources; the ratio of IJV board members appointed by each partner; the nationality of managers holding key executive positions in the IJVs; and the amount of strategic and operational control that each partner enjoyed. Results showed that equity share is the major lever for the exercise of strategic control and also influences operational control through its effects on the appointment of board members and appointments to key executive positions. Results also showed that providing non-capital resources has a direct effect on operational control in addition to its indirect effect through appointments to key executive positions.     

Equity ownership and control of international joint ventures in the retail sector

Abstract

This study examines the relationships that exist between consumers' perceptions of a retail environment and their emotions, satisfaction and behavioural intentions with respect to that shopping setting. A model of these relationships is developed and then tested in two distinct retail settings—shopping centres and traditional retailing areas. The results show that, in general, positive perceptions of a retail environment have a positive influence on positive emotions, on repatronage intentions, and on the desire to remain longer in the shopping area in both retail settings. However, some interesting differences emerge between shopping centres and traditional retailing areas: (i) the internal environment has a stronger effect on emotions in shopping centres than in traditional retailing areas; and (ii) the internal environment has a negative effect in shopping centres on the disposition to pay more.     

Agency costs and the structure and performance of international joint ventures

This article develops a principal-agent contractual model for the issue of the structure and performance of international joint ventures. From this model, hypotheses are generated relating the number of partners in a joint venture and the cross-cultural divergence of the partners with joint venture performance. These hypotheses are empirically assessed using a population of over 3,500 developed-country joint ventures.