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The performance correlates of ownership control: a study of U.S. and European MNE joint ventures in India

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  • Ramaswamy, Kannan
  • Gomes, Lenn
  • Veliyath, Rajaram

Abstract

This study reports findings from an empirical examination of the relationship between ownership control and joint venture performance. It conceptualized ownership control as a continuous variable so that the range of values of optimal equity holdings could be derived. Thus, it was possible to empirically determine both the form and strength of the relationship, aspects that prior studies have not addressed fully. The empirical examination was carried out on a longitudinal sample of joint ventures between U.S. and European MNEs and local firms in India. Results clearly show that the relationship between ownership control and performance is curvilinear. Contrary to the prevailing views that advocate an equal sharing of equity, performance was found to improve with increasingly unequal levels of ownership.

Suggested Citation

  • Ramaswamy, Kannan & Gomes, Lenn & Veliyath, Rajaram, 1998. "The performance correlates of ownership control: a study of U.S. and European MNE joint ventures in India," International Business Review, Elsevier, vol. 7(4), pages 423-441, August.
    • Handle: RePEc:eee:iburev:v:7:y:1998:i:4:p:423-441
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    Cited by:

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    2. Williams, Christopher & Lukoianova (Vashchilko), Tatiana & Martinez, Candace A., 2017. "The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice," International Business Review, Elsevier, vol. 26(1), pages 1-11.
    3. Somnath Lahiri, 2011. "India-focused publications in leading international business journals," Asia Pacific Journal of Management, Springer, vol. 28(2), pages 427-447, June.
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    5. Nakamura, Masao, 2005. "Joint venture instability, learning and the relative bargaining power of the parent firms," International Business Review, Elsevier, vol. 14(4), pages 465-493, August.
    6. Dikmen, L. & Cheriet, F., 2021. "Different is beautiful? Effects of asymmetry on international joint-ventures performance," Working Papers MoISA 202101, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
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