Determinants influencing the survival rate of joint ventures

Table of Contents

1 INTRODUCTION

2 THE JOINT VENTURE

2.1 WHAT IS A JOINT VENTURE?

2.2 DIFFERENT FORMS OF JOINT VENTURES

2.3 GOALS AND MOTIVES OF THE FORMATION

2.4 NEGATIVE EFFECTS FOR THE JOINT VENTURE PARENTS

3 HOW TO MEASURE JOINT VENTURE SURVIVAL

3.1 DIFFERENT METHODS IN THE LITERATURE

3.2 PROBLEM OF CLASSIFICATION

4 VARIABLES INFLUENCING THE SURVIVAL RATE OF JOINT VENTURES

4.1 INTERNAL FACTORS

4.1.1 Differences in equity ownership

4.1.2 Cultural distance

4.1.2.1 National culture differences

4.1.2.2 Corporate culture differences

4.1.3 Direct competition between the parents

4.1.4 Differences in size

4.1.5 Complementarity of partners’ resource contribution

4.1.6 Economic linkages

4.1.7 Trust

4.1.8 Partners’ joint venture experience

4.1.9 Organizational learning

4.1.10 Diversification strategy

4.2 EXTERNAL FACTORS

4.2.1 Risk and uncertainty in the host country

4.2.2 Currency fluctuation

4.2.3 Number of partners

5 SURVIVAL RATE FIGURES IN THE LITERATURE

6 NEGATIVE EFFECTS OF A DISSOLUTION

7 CONCLUSION

Research Objectives and Topics

The primary aim of this thesis is to identify and analyze the internal and external determinants that impact the longevity and survival rate of joint ventures. It seeks to provide management guidelines for strategic alliances by examining how various factors, such as ownership structure, cultural differences, and host-country risks, influence the stability and performance of these entities.

• Theoretical definitions and forms of joint ventures
• Methodological approaches to measuring joint venture survival
• Internal variables influencing longevity (equity, culture, competition, trust)
• External variables influencing longevity (country risk, currency, number of partners)
• Quantitative assessment of termination and instability rates

Excerpt from the Book

Summary of Chapters

1 INTRODUCTION: This chapter introduces the globalization context and the prevalence of joint ventures, outlining the thesis's purpose to explore the determinants of their survival.

2 THE JOINT VENTURE: This chapter defines joint ventures, identifies their various forms, and explains why firms use them for market expansion despite potential negative effects for the parent companies.

3 HOW TO MEASURE JOINT VENTURE SURVIVAL: This chapter reviews the academic literature on how scholars define and operationalize survival, stability, and failure, acknowledging the lack of a consistent measure.

4 VARIABLES INFLUENCING THE SURVIVAL RATE OF JOINT VENTURES: This core chapter categorizes and examines internal factors (e.g., equity, culture, trust, experience) and external factors (e.g., country risk, currency fluctuation) that influence venture longevity.

5 SURVIVAL RATE FIGURES IN THE LITERATURE: This chapter summarizes quantitative empirical results regarding termination rates and instability, highlighting the variance found in different research samples.

6 NEGATIVE EFFECTS OF A DISSOLUTION: This chapter explores the adverse consequences of joint venture termination, including reputational loss, the creation of new competitors, and impacts on the host country.

7 CONCLUSION: This chapter synthesizes the main findings, provides management implications for enhancing survival, and suggests directions for future academic research.

Keywords

Joint Venture, Survival Rate, Termination, Instability, Equity Ownership, Cultural Distance, Corporate Culture, Partner Experience, Organizational Learning, Country Risk, Currency Fluctuation, Strategic Alliance, International Business, Management Stability, Dissolution

Frequently Asked Questions

What is the core focus of this research paper?

The paper focuses on identifying the internal and external factors that determine whether a joint venture will survive or fail.

What are the central themes discussed in the thesis?

The central themes include the definition and motivation for joint ventures, methods for measuring their survival, and the impact of specific variables such as equity distribution, cultural differences, and host-country risks.

What is the primary goal of the author?

The goal is to provide guidelines for companies entering strategic alliances to help them minimize the risk of premature dissolution.

Which scientific methodology is used?

The author uses a literature review and synthesis of previous empirical studies to analyze how different variables correlate with the survival and instability of joint ventures.

What topics are covered in the main section?

The main section details internal factors like equity control, trust, and organizational learning, and external factors like host country political uncertainty and currency fluctuations.

How is the research characterized by its keywords?

The research is characterized by terms related to international business management, focusing on stability, strategic alliance performance, and specific risk factors in joint ownership.

Why might high equity control for a foreign partner be preferred?

A higher equity level can lead to higher survival rates in cases of high asset specificity, as it incentivizes the foreign partner to transfer firm-specific knowledge and reduces the potential for opportunistic behavior.

What is the 'honeymoon effect' in the context of joint ventures?

The 'honeymoon effect' suggests that high initial commitments by parent firms shield a joint venture from failure during its early stages, with mortality risks increasing as time passes and problems arise.