Effectiveness of Dyadic and Multi-Party Joint Ventures

Canal, Esteban García; Valdés-Llaneza, Ana; Ariño, Africa

doi:10.1177/0170840603024005004

Cited by 108 publications

(133 citation statements)

References 73 publications

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“…In addition, while Garcia-Canal et al (2003) argue that compared to dyadic JVs, MPIJVs are likely to rely to a lower extent on trust and would thus benefit more from dominant control, our findings indicate that dominant control exerted by sub-groups formed based on shared national backgrounds increases the risk of dissolution. At the same time, however, the findings for our control variable that reflected unequal equity shares confirms Garcia-Canal et al's (2003) arguments.…”

Section: Discussionmentioning

confidence: 57%

“…Although some studies have stressed the importance of accounting for the qualitative differences among partners when investigating the effects of an increase in the number of partners (Beamish & Kachra, 2004;Garcia-Canal, et al, 2003) our study extends their analyses. It does so by focusing on diversity as a qualitative characteristic of MPIJVs and theorizing about the effects that the different facets of this diversity have on the dissolution of such ventures.…”

Section: Discussionmentioning

confidence: 72%

“…While some studies have argued for a negative impact (Garcia-Canal, et al, 2003;Gong, et al, 2007;Hennart & Zeng, 2002) and others have argued for a positive impact (Beamish & Kachra, 2004), empirical evidence on this question remains inconclusive (Beamish & Kachra, 2004;Hennart & Zeng, 2002;Park & Russo, 1996). By combining of RBV and TCE arguments to investigate the effects of qualitative differences between MPIJVs, we reconcile these conflicting findings on the nature of the association between the number of partners and IJV outcomes.…”

Section: Discussionmentioning

confidence: 81%

“…Jehn, 1995). Disparity among group members increases the risk of conflicts and coordination costs owing to partners' diverging experiences, approaches to problem solving and cultural backgrounds (e.g., Garcia-Canal, et al, 2003). Based on TCE logic, we thus expect disparity among partners to have a positive effect on MPIJV dissolution because of the associated increase in coordination and transaction costs and the associated reduction in the IJV's net value to partners making them more likely to terminate an IJV.…”

Section: The Impact Of Disparity On Mpijv Dissolutionmentioning

confidence: 99%

“…For example, 55 percent of the 737 international joint ventures (IJVs) established by Japanese firms in Makino and Beamish (1998)'s sample and 49 percent of Garcia-Canal, Valdes-Llaneza, and Arino's (2003) sample of 80 IJVs established by Spanish firms involved three or more partners. Similarly, 30 percent and 25 percent, respectively, of Gong, Shenkar, Luo, and Nyaw (2007) and Griffith, Hu and Chen's (1998) samples of IJVs in China had three or more partners.…”

Section: Introductionmentioning

confidence: 99%

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The impact of partner diversity within multiparty international joint ventures

Mohr

Wang

Goerzen

2016

International Business Review

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Despite the significant role that multiparty international joint ventures (MPIJVs) play within multinational enterprises, we know little about the significant challenges associated with the management of these ventures. Therefore, we combine the Resource-based View of the Firm and Transaction Cost Economics to investigate the effects of the key aspects of partner diversity (i.e., variety, balance, and disparity) on MPIJV dissolution. We test our hypotheses using a dataset of 248 MPIJVs in China. We find empirical support for a U-curve shaped effect of variety and a negative linear effect of balance on MPIJV dissolution.

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Section: Discussionmentioning

confidence: 57%

Section: Discussionmentioning

confidence: 72%

Section: Discussionmentioning

confidence: 81%

Section: The Impact Of Disparity On Mpijv Dissolutionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The impact of partner diversity within multiparty international joint ventures

Mohr

Wang

Goerzen

2016

International Business Review

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Institutional differences and arbitration mechanisms in international joint ventures

Devarakonda

Klijn

Reuer

et al. 2019

Global Strategy Journal

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Research summary We theoretically and empirically study the effects of legal institutions on the inclusion of arbitration provisions in international joint venture (IJV) contracts. Legal institutions offer a public trilateral forum to handle interpartner disputes. However, these institutions function differently across countries, which can impede IJV partners from resolving disputes effectively through court systems. Alternatively, partners can take advantage of private trilateral resolution mechanisms in the form of arbitration. We argue and demonstrate that differences among partners' home country legal institutions regarding the legal traditions, as well as the importance of procedures and costs imposed in these countries for enforcing contracts, increase the likelihood of choosing arbitration over litigation. We also compare results for partners' recourse to IJV boards as a private, bilateral means of addressing conflicts. Managerial summary IJVs are powerful levers for market expansion and access to resources and capabilities. The risks of corrosive disputes caused by conflicting interests or misunderstandings among partners are nonetheless far from being negligible. Our study helps decision makers and managers increase their understanding of the options and remedies available for resolving disputes. We consider three mechanisms in particular: public courts, arbitration, and the board of directors. Findings show that considering the partners' home country legal environments but also the discrepancies between these environments is essential when it comes to giving preference to arbitration over public courts. Findings also suggest that decisions related to internal private ordering (i.e., relying on the JV board of directors) are driven by the exchange characteristics more than by institutional considerations.

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Board involvement in international joint ventures

Reuer

Klijn²,

Lioukas

2013

Strat. Mgmt. J.

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The last two decades have witnessed substantial scholarly interest in corporate boards, yet little research has been devoted to boards of international joint ventures (IJVs). We combine the corporate governance and alliance governance literatures in order to study this important ex post governance mechanism for IJVs. We identify a fundamental tension inherent in IJVs, which arises from the unique features of this organizational form and influences the level of involvement by their boards. International joint ventures are hybrid organizational forms that can require administrative control to facilitate monitoring and coordinated adaptation in the presence of exchange hazards. At the same time, the fact that IJVs operate in different host countries can make it efficient to delegate authority to local management for certain collaborations. In investigating the determinants of IJV board involvement, we therefore examine characteristics of INTRODUCTIONOver the last four decades, boards of directors have regularly been mentioned as a facet of the governance of international joint ventures (IJVs). The IJV board represents a key formal governance mechanism available during joint venture implementation as it provides administrative control to facilitate monitoring and coordination of an IJV for parent firms (e.g., Oxley, 1997;Pisano, 1989;Williamson, 1991 strategies and actions fit with the parent firm's and can address performance problems or conflicts that might arise (e.g., Ariño and de la Torre, 1998;Björkman, 1995;García-Canal, Valdés-Llaneza, and Ariño, 2003;Geringer and Hebert, 1989;Leksell and Lindgren, 1982;Ravasi and Zattoni, 2006;Schaan, 1983). At the same time, efficiency considerations would suggest that not all IJV boards should be heavily engaged as there might be gains to delegating more authority to local management for certain international collaborations.While the importance of IJV boards has been noted over the years, and practitioners have recently identified opportunities for more effective governance practices for joint ventures (e.g., Bamford and Ernst, 2005;Bamford, Ernst, and Fubini, 2004;Gibson Dunn, 2012;Hewitt, 2005), little theoretical or systematic empirical research Boards of International Joint Ventures 1627has been devoted to IJV boards. In the literature on collaborative strategy, recent studies of formal governance in alliances have instead focused on the safeguards and other provisions that firms build into contracts (e.g., Hagedoorn and Hesen, 2007;Li, Poppo, and Zhou, 2010;Luo, 2002;Reuer and Ariño, 2007;Ryall and Sampson, 2009). However, given the intangible resources exchanged and developed in alliances, and given the imperfect information partners have about each other's private interests and how a collaboration will evolve, such contracts will be incomplete (e.g., Elfenbein and Lerner, 2003). Faced with this problem, parties can turn to ex post governance mechanisms such as boards to address gaps in formal agreements. In the joint venture literature in particular, Kumar and Seth ...

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Effectiveness of Dyadic and Multi-Party Joint Ventures

Cited by 108 publications

References 73 publications

The impact of partner diversity within multiparty international joint ventures

The impact of partner diversity within multiparty international joint ventures

Institutional differences and arbitration mechanisms in international joint ventures

Board involvement in international joint ventures

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