The Influence of Institutional Forces on International Joint Ventures’ Foreign Parents’ Opportunism and Relationship Extendedness

Abstract

Institutional forces influence the formation of international joint ventures (IJVs) in emerging economies and shape both their parents' behaviors and their marketing strategies. Whereas previous research has centered on governance mechanisms that deter opportunism, this study investigates the influence of institutional forces (i.e., rule of law, government intervention, and dysfunctional competition) on the IJV's foreign parent's opportunism. The authors find that rule of law and dysfunctional competition curtail opportunism, whereas government intervention drives opportunism. In addition, relationships between institutional forces in local markets and the IJV's foreign parent's opportunism depend on the IJV's marketing capability. The authors further examine the influence of the foreign parent's opportunism on IJV relationship extendedness and find support for a negative relationship between opportunism and the IJV's continuity. This study enriches institutional theory and identifies the boundary of the influence of institutional forces on opportunism. Because opportunism is a critical relationship hazard, the findings of this study have important implications forIJVs' partnership management.

Importer and exporter capabilities, governance mechanisms, and environmental factors determining customer-perceived relationship value

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The Relative Advantage of Marketing over Technological Capabilities in Influencing New Product Performance: The Moderating Role of Country Institutions

“…Second, our study contributes to the institution-based view of the firm and the related stream of research in international marketing on country-specific influences on firm performance (e.g., Chang, Bai, and Li 2015;Dwyer, Mesak, and Hsu 2005). The institutional view suggests that the market environment shapes which strategies firms employ, what kind of choices they make, and how they perform.…”

Betrayal in international buyer-seller relationships: Its drivers and performance implications

“…Inevitably, business partners pursuing their own self-interest will betray others whenever this is beneficial for them (Grover, 1997). Opportunism will inevitably impede development of reciprocity and commitment among parties (Luo, 2009), lead to questions over the reliability of the business partner (Barnes, Leonidou, Siu, & Leonidou, 2010;Katsikeas et al, 2009;Saleh, Ali, & Julian, 2014), and heighten risks concerning the future of the international business relationship (Chang, Bai, & Li, 2015;Hsieh, Rodrigues, & Child, 2010). Thus, one would expect that:…”