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Performance implications of capability exploitation and upgrading in international joint ventures

Author

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  • Wu Zhan

    (The University of Sydney)

  • Yadong Luo

    (University of Miami)

Abstract

Abstract and Key Results This study investigates (1) how capability exploitation and capability upgrading are associated with IJVs’ financial and competitive outcomes in an emerging market, and (2) how environmental dynamism (the key construct characterizing an emerging market) and interpartner cooperation (the key construct describing an IJV) moderate the effect of capability exploitation and upgrading on IJV performance. Results suggest that IJVs in a foreign emerging market tend to perform better in both financial and competitive terms when they possess greater abilities to exploit current resources contributed by foreign and local partners and to continuously upgrade and develop new capabilities. The contribution of capability exploitation and upgrading to IJV performance is stronger when IJVs operate in a more dynamic environment. When interpartner cooperation is superior, capability exploitation plays a bigger role in improving performance.

Suggested Citation

  • Wu Zhan & Yadong Luo, 2008. "Performance implications of capability exploitation and upgrading in international joint ventures," Management International Review, Springer, vol. 48(2), pages 227-253, April.
    • Handle: RePEc:spr:manint:v:48:y:2008:i:2:d:10.1007_s11575-008-0013-0
    DOI: 10.1007/s11575-008-0013-0
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    5. Sinkovics, Noemi & Hoque, Samia Ferdous & Sinkovics, Rudolf R., 2018. "Supplier Strategies and Routines for Capability Development: Implications for Upgrading," Journal of International Management, Elsevier, vol. 24(4), pages 348-368.
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