How long will the marriage of Sino-Foreign JVs in China last? A theoretical and empirical investigation |
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| Institution: | 1. School of Business and Economics, Loughborough University, Loughborough, LE11 3TU, United Kingdom;2. Business School, University of Glasgow, Glasgow G12 8QQ, United Kingdom;1. Warwick Business School, University of Warwick, Coventry CV4 7AL, UK;2. Queens’ College, University of Cambridge, Cambridge CB3 9ET, UK;1. Department of Economics & Management, University of Pisa, Via Ridolfi 10, 56124 Pisa, Italy;2. Department of International Business and Economics, University of Greenwich Business School, Old Royal Naval College, Park Row, London SE10 9LS, UK;3. Max Planck Institute of Economics, Evolutionary Economics Group, Kahlaische Straße 10, 07745 Jena, Germany;4. Department of Political and Social Sciences, University of Pavia, Corso Strada Nuova 65, 27100 Pavia, Italy;5. WHU – Otto Beisheim School of Management, Burgplatz 2, 56179 Vallendar, Germany;1. University of Bari, Department of Economics, Italy;2. LUMSA, University of Rome, Department of Economic and Political Sciences and Modern Languages, Italy;1. Department of Finance and International Business, Fu Jen Catholic University, 510 Chung Cheng Road, Hsinchuang, New Taipei City 24205, Taiwan;2. MBA Program in International Management, Fu Jen Catholic University, 510 Chung Cheng Road, Hsinchuang, New Taipei City 24205, Taiwan;3. Department of Business Administration, St. John''s University/Taipei Campus, 499, Sec. 4, Tam King Road, Tamsui, New Taipei City, Taiwan |
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| Abstract: | 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. |
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| Keywords: | International joint ventures Knowledge access Longevity Senior Chinese Management |
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