The dynamics and effectiveness of international joint ventures

Abstract

This article addresses the instability of international joint ventures (IJVs) from a corporate strategy perspective. Data on 272 terminated IJVs are presented by way of illustration. The empirical patterns demonstrate IJV termination most often involves a reallocation of IJV ownership between existing parent firms, and these changes in ownership and resource commitments are a function of both firms' relationships to the venture. The article submits the transitory character of IJVs often stems from the nature of parent firms' strategic intents when forming IJVs. This suggests IJV instability is not always tantamount to collaborative failure as is widely assumed.