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Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner

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  • Hsieh, Linda H.Y.
  • Rodrigues, Suzana B.
  • Child, John
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    Abstract

    This paper draws on a risk analysis framework in order to develop a systematic understanding of the risks perceived by partners, and to investigate the implications of risk perception for the configuration of control, in the post-formation governance of international joint ventures. The key variables in this framework consist of six situational factors which are considered as potential antecedents of perceived risk: conflict, opportunism, cultural difference, dependence, partner fit, and ownership share; partner's perception of risk; and post-formation governance as a set of outcome variables. The framework is tested using a sample of international joint ventures located in Taiwan. The findings show that conflicts between partners, opportunistic behavior by the local partner, cultural differences, and perceived partner misfit are related to foreign partners' risk perceptions. This study suggests that when foreign partners face likely performance and partnership risks after an IJV is established, they tend to resort to tighter post-formation governance measures in order to increase or maintain their confidence in their joint ventures.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 16 (2010)
    Issue (Month): 3 (September)
    Pages: 288-303

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    Handle: RePEc:eee:intman:v:16:y:2010:i:3:p:288-303

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    Related research

    Keywords: International joint ventures Risk perception Post-formation dynamics Control Adaptation;

    References

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    Cited by:
    1. Lau, Victor P. & Dimitrova, Mihaela N. & Shaffer, Margaret A. & Davidkov, Tzvetan & Yordanova, Desislava I., 2012. "Entrepreneurial Readiness and Firm Growth: An Integrated Etic and Emic Approach," Journal of International Management, Elsevier, vol. 18(2), pages 147-159.
    2. Hou, Wanrong & Li, Sali & Priem, Richard L., 2013. "How do CEOs matter? The moderating effects of CEO compensation and tenure on equity ownership in international joint ventures," Journal of International Management, Elsevier, vol. 19(2), pages 138-151.

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