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Country risk, national cultural differences between partners and survival of international joint ventures in Brazil

  • Meschi, Pierre-Xavier
  • Riccio, Edson Luiz
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    This article aims to identify the main and interaction effects of two country-level variables, namely national distance and country risk, on the survival of international joint ventures in emerging markets. Research hypotheses predicting the negative impact of national distance and country risk on survival of international joint ventures are formulated in this article. These research hypotheses are examined in a sample of 234 international joint ventures formed in Brazil between 1973 and 2004. These international joint ventures were subjected to an event history analysis over a period of time ranging from 1973 to 2006. The empirical results show that large national cultural differences between local and foreign partners increase the instability of international joint ventures, whereas the survival of these alliances does not seem to be affected either by the economic and political uncertainty of Brazil. Furthermore, the national distance between local and foreign partners has effects on survival that are variable according to the life cycle of international joint ventures.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0969593107001400
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    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 17 (2008)
    Issue (Month): 3 (June)
    Pages: 250-266

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    Handle: RePEc:eee:iburev:v:17:y:2008:i:3:p:250-266
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    1. J Michael Geringer & Louis Hebert, 1991. "Measuring Performance of International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan, vol. 22(2), pages 249-263, June.
    2. Yigang Pan, 1996. "Influences on Foreign Equity Ownership Level in Joint Ventures in China," Journal of International Business Studies, Palgrave Macmillan, vol. 27(1), pages 1-26, March.
    3. Jean-Fran�ois Hennart & Ming Zeng, 2002. "Cross-Cultural Differences and Joint Venture Longevity," Journal of International Business Studies, Palgrave Macmillan, vol. 33(4), pages 699-716, December.
    4. Aimin Yan, 1998. "Structural Stability and Reconfiguration of International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan, vol. 29(4), pages 773-795, December.
    5. Chol Lee & Paul W Beamish, 1995. "The Characteristics and Performance of Korean Joint Ventures in LDCS," Journal of International Business Studies, Palgrave Macmillan, vol. 26(3), pages 637-654, September.
    6. Jiatao Li & Stephen Guisinger, 1991. "Comparative Business Failures of Foreign-Controlled Firms in the United States," Journal of International Business Studies, Palgrave Macmillan, vol. 22(2), pages 209-224, June.
    7. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 411-432, September.
    8. Harry G Barkema & Freek Vermeulen, 1997. "What Differences in the Cultural Backgrounds of Partners Are Detrimental for International Joint Ventures?," Journal of International Business Studies, Palgrave Macmillan, vol. 28(4), pages 845-864, December.
    9. 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.
    10. Seung Ho Park & Michael V. Russo, 1996. "When Competition Eclipses Cooperation: An Event History Analysis of Joint Venture Failure," Management Science, INFORMS, vol. 42(6), pages 875-890, June.
    11. Vijay Pothukuchi & Fariborz Damanpour & Jaepil Choi & Chao C Chen & Seung Ho Park, 2002. "National and Organizational Culture Differences and International Joint Venture Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 243-265, June.
    12. Tsang, Eric W.K., 2005. "Influences on foreign ownership level and entry mode choice in Vietnam," International Business Review, Elsevier, vol. 14(4), pages 441-463, August.
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