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The Instability of Joint Ventures: Learning from Others or Learning to Work with Others


  • José Mata
  • Pedro Portugal


We analyze the patterns of international joint venture termination, to compare the learning and trust views of joint ventures. We distinguish between three ways in which termination may occur and allow for the possibility that some joint ventures never confront the chances of terminating in these ways. We find that the chances of terminating a joint venture increase over time, in particular when the joint venture is terminated by dissolution of the firm and by acquisition by the foreign partner. Our findings thus support the view thatlearning outperforms trust in explaining the time patterns of joint venture survival.

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  • José Mata & Pedro Portugal, 2010. "The Instability of Joint Ventures: Learning from Others or Learning to Work with Others," Working Papers w201028, Banco de Portugal, Economics and Research Department.
  • Handle: RePEc:ptu:wpaper:w201028

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    1. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
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    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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