untitled.pdf (362.58 kB)
Explaining alternative termination modes of international joint ventures
Version 2 2023-06-07, 08:46
Version 1 2023-06-07, 07:01
journal contribution
posted on 2023-06-07, 08:46 authored by Palitha Konara, Zita Stone, Alex MohrPurpose The authors combine options logic with transaction cost economics to explain why firms maintain, divest or buy out their international joint ventures (IJVs). It is suggested that a decline in environmental risk and higher partner-related risk makes a firm more likely to acquire an IJV but less likely to divest an IJV. The study also investigates how IJV age moderates the effects of a decline in environmental risk and higher partner-related risk. Design/methodology/approach The study employs competing risks analyses to examine the drivers of different termination outcomes using a dataset consisting of 459 IJVs in the People's Republic of China, of which 110 were either acquired or divested by their foreign parent. Findings The study finds that changes in environmental risk and partner-related risk affect how firms terminate their IJVs in the People's Republic of China. Specifically, the authors find that the effect of exogenous and endogenous risk are more pronounced for the acquisition of IJVs than for the divestment of IJVs. Research limitations/implications The study contributes to international marketing research by complementing options logic with transaction cost economics to provide a theoretical explanation of the different ways in which IJVs in the People's Republic of China are terminated. Practical implications IJVs continue to be an important yet often unstable method to serve international markets. Our findings increase managers' awareness of the effect that two important sources of risk may have on the termination of IJVs in the People's Republic of China. Originality/value The study provides novel insights into the effect that changes in exogenous and endogenous risk have on a firm's choice of termination mode drawing on novel data on the different ways in which foreign firms have terminated their IJVs in the Peoples' Republic of China.
History
Publication status
- Published
File Version
- Published version
Journal
International Marketing ReviewISSN
0265-1335Publisher
EmeraldExternal DOI
Issue
6Volume
37Page range
1121-1153Department affiliated with
- Strategy and Marketing Publications
Research groups affiliated with
- International Business Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2020-05-15First Open Access (FOA) Date
2020-06-02First Compliant Deposit (FCD) Date
2020-05-15Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC