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Match-Making in International Joint Ventures in Emerging Economies: Aligning Asymmetric Financial Strength and Equity Stake

Author

Listed:
  • Pierre-Xavier Meschi

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMU IAE - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - AMU - Aix Marseille Université)

  • Edson Luiz Riccio
  • Anne Norheim-Hansen

Abstract

This paper attends to prior equivocal results concerning partner asymmetry and international joint venture (IJV) performance. More specifically, we examine how asymmetric financial strength between the partners influences IJV termination in emerging economies, and consider the asymmetry direction as well as the local partner's equity stake as contingency factors. Our event history analysis of 119 IJVs formed in Brazil shows that asymmetric financial strength increases the likelihood of termination. However, notably, the findings reveal that higher local partner financial strength is less harmful to IJV performance than lower local partner financial strength. Moreover, under both conditions, IJV performance is better when the highest equity stake is attributed to the local partner.

Suggested Citation

  • Pierre-Xavier Meschi & Edson Luiz Riccio & Anne Norheim-Hansen, 2017. "Match-Making in International Joint Ventures in Emerging Economies: Aligning Asymmetric Financial Strength and Equity Stake," Post-Print hal-01423749, HAL.
    • Handle: RePEc:hal:journl:hal-01423749
    DOI: 10.1007/s11575-016-0285-8
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    Citations

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    Cited by:

    1. Pierre‐Xavier Meschi & Anne Norheim‐Hansen, 2020. "Partner‐diversity effects on alliance termination in the early stage of green alliance formation: Empirical evidence from carbon‐emission reduction projects in Latin America," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 250-261, January.
    2. Billur Akdeniz, M. & Berk Talay, M., 2022. "Happily (N)ever after: An empirical examination of the termination of IJVs across emerging versus developed markets," Journal of Business Research, Elsevier, vol. 148(C), pages 390-404.

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