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The characteristics and stock-market performance of international joint ventures located in three host-country groups: An extension and empirical validation

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  • Merchant, Hemant
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    Abstract

    In a well-known study of joint venture (JV) characteristics, Beamish (1985) compared the attributes and performance of JVs located in developed and developing countries. This study advances Beamish's (1985) work by circumventing some of its key limitations. It compares the structure and stock-market performance of two-party equity JVs across three host-country groups: (i) developed countries, (ii) newly industrialized countries, and (iii) developing countries (including Emerging markets and transition economies). Based on a cross-sectional sample of nearly 1100 JVs involving American firms and non-American partners, this study finds that JV characteristics diverge as well as converge vis-à-vis three host-country groups. Interestingly—unlike Beamish (1985)—differences in JV configurations across these groups do not result in differences in abnormal returns to American parents. However, some JV characteristics consistently influence firms’ shareholder value (albeit sometimes in opposite directions) whereas the valuation impact of other characteristics depends upon a particular host-country group.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0969593112000054
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    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 21 (2012)
    Issue (Month): 6 ()
    Pages: 1173-1189

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    Handle: RePEc:eee:iburev:v:21:y:2012:i:6:p:1173-1189
    DOI: 10.1016/j.ibusrev.2012.01.004
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description

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    Keywords: Alliances; Joint ventures; Performance; Trends;

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    Cited by:

    1. Mallin, Chris & Melis, Andrea & Gaia, Silvia, 2015. "The remuneration of independent directors in the UK and Italy: An empirical analysis based on agency theory," International Business Review, Elsevier, vol. 24(2), pages 175-186.
    2. López-Duarte, Cristina & González-Loureiro, Miguel & Vidal-Suárez, Marta M. & González-Díaz, Belén, 2016. "International strategic alliances and national culture: Mapping the field and developing a research agenda," Journal of World Business, Elsevier, vol. 51(4), pages 511-524.

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