Managing Joint Venture

Managing Joint Venturesby Paul W. Beamish and Nathaniel C. Lupton

Executive OverviewJoint ventures aid firms in accessing new markets, knowledge, capabilities, and other resources. Yet they canbe challenging to manage, largely because they are owned by two or more parent companies. Thesecompanies may have competing or incongruent goals, differences in management style, and in the case ofinternational business, additional complexities associated with differing government policies and businesspractices. We examine research on joint venture (JV) performance in order to identify prominent academicdiscussions established over the last 25 years. From this research, we draw implications from past researchand areas for future research on successfully managing JVs, taking into account the decisions JV partnersmust make throughout the partnering process, from initial motivations through partner selection andnegotiation of terms to implementation and ongoing management. Key implications include the necessityof honesty, trust, and commitment for the success of the JV, settling disputes by focusing on what is bestfor the JV rather than individual partner objectives, and division of managerial responsibilities accordingto the functional expertise of each partner.

Firms enter into joint venture (JV) agreementsin order to create new products and services,enter new and foreign markets, or potentially

both (Beamish, 2008). While foreign ownershiprestrictions that necessitated the involvement of alocal partner previously have been eliminated inmany countries, international JVs (IJVs) stillmake up a substantial proportion of foreign entryand investment. Equity JVs are legally distinctbusiness units, owned by two or more partnerfirms. Parent firms may hold as little as a 5%equity stake in a JV although, in many countries,local regulators do not even recognize investmentsof less than 20% as giving investors significantinfluence. JVs enable firms to access each others’complementary resources and capabilities in orderto achieve economies of scope and/or scale, and todevelop new products faster, more reliably, andmore cheaply than could be done by either firmacting alone or through acquisition. In IJVs, local

partners help foreign firms navigate unfamiliarbusiness practices and policies, and sometimes in-crease a firm’s credibility in the eyes of localconsumers.

While JVs are not the only means of access-ing the resources of another firm, they are oftenpreferred to licensing, contracting, and othernonequity strategic alliances. In highly uncer-tain foreign markets in particular, IJVs tend tooutperform wholly owned subsidiaries (WOSs)because of the benefits a local partner provides(Brouthers, 2002). Unlike nonequity alliances,the capital invested in a JV signals partnercommitment, thereby enhancing the probabilityof success. This commitment enhances cooper-ation among the parent firms, which is espe-cially important when they are competitors, asis sometimes the case. Also, the specialized re-sources and capabilities provided to JVs are noteasily duplicated.

The importance of JVs in the global economyis reflected in the attention that managementscholars have afforded them. They have beenthe subject of hundreds of research studies pub-

The authors would like to acknowledge Chris Chung, CharlesDhanaraj, Jae Jung, Anthony Goerzen, Andreas Schotter, two anonymousreviewers, and Garry Bruton for the helpful comments they provided onearlier versions of this paper.

* Paul W. Beamish ([email protected]) is Professor of International Business at the Richard Ivey School of Business, The Universityof Western Ontario.Nathaniel C. Lupton ([email protected]) is a Doctoral Candidate at the Richard Ivey School of Business, The University of WesternOntario.

2009 75Beamish and Lupton

Copyright by the Academy of Management; all rights reserved. Contents may not be copied, e-mailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express writtenpermission. Users may print, download, or e-mail articles for individual use only.

lished in a host of scholarly journals. The im-plications of individual studies, however, canlead to conflicting recommendations for themanagement of JVs. These conflicting recom-mendations may be a result of contextual factorssuch as JV and parent firm nationalities, evolu-tionary stage of the economy in which the JV islocated, and the industry in which the JV isestablished. While entry mode and other con-trol mechanisms have received substantialscholarly attention, the performance implica-tions of the various decisions made by managersare ultimately more important (Geringer & He-bert, 1989). Thus, we focus our review on fac-tors that influence JV performance. Our inten-tion is not to review and consolidate all prior JVresearch, but to contribute to a growing researchagenda by proposing implications derived from areview of influential JV research and proposingareas for future research.

About the JV Literature IncludedinOurReview

Here we focus on the research that appears tohave had the greatest impact. We measuredimpact by the number of citations using the

Social Science Citation Index (SSCI). We didnot include book titles1. However, a number ofbooks have been highly influential on JV manage-ment practice and scholarly research. We presentthese books titles and citation information inTable 1. Journal articles are presented in Table 2.For further detail on the methodology we used toconduct our research review, see the Appendix.

CurrentKnowledgeon theEffectiveManagementof JVs

Each study we reviewed fell into one or moreof the six established JV research streamspresented in Table 3. We recognize that our

list cannot possibly cover every JV managementissue researched to date and that researchers arelikely examining other topics (that did notmake our list due to low citations) in greaterdepth at present.

After classifying the articles into one or moreof the six JV research streams, we then endeav-ored to determine the importance of each man-agerial issue during the JV partnering process.We did so by identifying the stages duringwhich managers make decisions that impactthese issues. This resulted in a mapping of thekey managerial issues onto the JV partneringprocess. The JV partnering process proceedsthrough four identifiable phases: (a) assessingthe strategic logic for creating the venture, (b)selecting a partner, (c) negotiating the terms,and (d) implementation and ongoing manage-ment of the business. Not surprisingly, mostscholarly research is focused on already-estab-lished JVs as there is less opportunity to conductresearch in the formative stages. However, thereare important decisions to be made by managersat each phase of the JV partnering process thatultimately affect the probability that the ven-ture will perform to the satisfaction of the part-ners. To assess the extent to which scholarlyresearch provides insight to managers who makethese decisions, we review the most highly citedJV performance articles published in the last 25years.

Each of the six managerial issues we identify ismore relevant during some JV partnering phasesthan others. Governance, for example, is an on-going concern for a JV, but some of the biggestdecisions influencing its form are actually made aspartners negotiate terms. Figure 1 depicts thephases in which the six managerial issues are mostsalient. With the exception of firm international-ization, all issues tend to apply to the ongoingmanagement of the JV. As we discuss the results ofthe JV studies in our sample, we consider thesephases in order to provide implications concern-ing how decisions made in one phase of JV part-nering will affect ongoing performance and man-agement.

In what follows, we summarize insightsgained from JV research and consider potentialextensions of existing research as well as theirimplications for JV management. We considerthe extent to which current knowledge guidesmanagers in making decisions that affect the

1 For a detailed description of why book titles were not included in ourresults, see footnote 2 of Table 1.

76 MayAcademy of Management Perspectives

design, management, and ultimately perfor-mance of their JVs.

Performance

JV performance is typically believed to be anoutcome of the strategies implemented by manag-ers and employees. However, performance re-mains an issue of importance throughout the part-nering process, beginning with the strategicrationale for entering into a JV. One of the pri-mary questions to be answered is what constitutesan appropriate measure of JV performance (Grif-fith, Cavusgil, & Xu, 2008). Financial indicators

such as profitability and stock market returns arecommon measures yet are less frequently used inscholarly research because (a) they are often notavailable in public databases, especially in thecase of IJVs, (b) JVs usually do not issue or tradestock on the market, and (c) financial measuresare sometimes not applicable given the objec-tives of a JV.

Measures that are commonly used in JV re-search can be divided into subjective, meaningthey are the opinions of JV managers, and objec-tive, meaning they can be obtained from externalsources such as company financial statements or

Table1Often-Cited JVandAllianceBooks

Joint Ventures

Author(s)/Editor(s) Title (Year of Publication)TimesCited1

Times Citedin SSCI2

J. P. Killing Strategies for Joint Venture Success (1983) 39 237L. G. Franko Joint Venture Survival in Multinational Corporations (1971) 26 145K. R. Harrigan Strategies for Joint Ventures (1985) 15 292K. R. Harrigan Managing for Joint Venture Success (1986) 13 173P. W. Beamish Multinational Joint Ventures in Developing Countries (1988) 12 98J. W. C. Tomlinson The Joint Venture Process in International Business: India and Pakistan (1970) 11 55W. G. Friedmann & J. P. Beguin Joint International Business Ventures in Developing Countries (1971) 9 24A. R. Janger Organization of International Joint Ventures (1980) 9 28J. A. Stuckey Vertical Integration and Joint Ventures in the Aluminum Industry (1983) 7 8S. F. Berg, J. Duncan, & P. Friedman Joint Venture Strategies and Corporate Innovation (1982) 5 27J. M. Geringer Joint Venture Partner Selection: Strategies for Developed Countries (1988) 5 59K. J. Hladik International Joint Ventures: An Economic Analysis of U.S.-Foreign Business

Partnerships (1985)5 92

D. C. Mowery International Collaborative Ventures in U.S. Manufacturing (1988) 5 103M. M. Pearson Joint Ventures in the People’s Republic of China: The Control of Foreign Direct

Investment Under Socialism (1991)5 78

Alliances

Author(s)/Editor(s) Title (Year of Publication)TimesCited

Times Citedin SSCI

F. J. Contractor & P. Lorange (Eds.) Cooperative Strategies in International Business (1988) 51 457P. W. Beamish & J. P. Killing (Eds.) Cooperative Strategies (1997, 3 volumes) 21 51J. Bleeke & D. Ernst Collaborating to Compete: Using Strategic Alliances and Acquisitions in the

Global Marketplace (1993)8 91

1Times cited refers to the number of articles included in our review (n � 86) that cite the book. Where multiple chapters within anedited book have been cited by an article, only the first is counted.

2Times cited in SSCI refers to the number of times a book is cited by all works indexed in the SSCI database. While this information canbe obtained by searching on the author’s name in a cited reference search, these book titles are not returned when a general search term,such as “joint venture,” is used. After consulting with representatives from Thomson Reuters, it was determined that books are not asextensively indexed in the database as journal articles. Hence, while we were able to find citation counts for these specific books, theremay be other books that have been influential in JV management and research.


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third-party surveys. Subjective measures are typi-cally obtained through surveys of managers’ satis-faction with financial and/or operational perfor-mance, the extent to which JV goals are achieved,knowledge transfer, and/or capability develop-ment. Common objective measures include prof-itability, assessed by margins, return on assets, etc.;longevity, assessed by the age of the joint venture;survival, referring to whether the JV remains an

ongoing concern or terminates; and stability2, as-sessed by changes in ownership (Geringer & He-bert, 1991). Other objective measures range frompatent counts to changes in the market value offirms creating or acquiring JVs.

2 Some authors use the term stability in a manner consistent with thedefinition of survival that we use here. In discussing the results of thosearticles, we use the term survival to avoid confusion.

Table3JVManagement IssuesRepresented inCurrentResearch

JV Management Issue Description ArticlesPerformance Identification and measurement of JV performance and the interrelatedness of measures 6Knowledge management Organizational learning, knowledge sourcing, capability development, knowledge spillovers,

intellectual capital protection, others26

Internationalization Performance implications of location selection, international partner selection, industry selection,mode and timing of foreign market entry, parent firm international experience

11

Cultural differences The impact of national and organizational cultural differences on performance 7Governance and control Performance implications of equity ownership structure, bargaining power, and social and

financial controls in JVs28

Valuing a JV Factors influencing the market value of a JV or parent firm gaining access to resources through aJV or the acquisition of a JV

9

Figure1ImportanceofManagerial IssuesDuring the JVPartneringProcess

Governance

Performance

Knowledge Management

Managing Cultural Differences

Internationalization

Valuing the JV

Assessing StrategicRationale

Selecting a Partner

Negotiating Terms

Implementation and

Management


Anderson (1990) argued that subjective mea-sures are often more appropriate indicators of JVperformance because goals vary and cannot alwaysbe measured. If the purpose of an IJV is to accesslocal market knowledge or technology, for exam-ple, the best indicator of success is probably thesatisfaction of those who most closely manage it.This also represents a situation in which partnersto the JV may not be satisfied by achieving thesame objectives. With the exception of JV stabil-ity, however, subjective and objective measurestend to be somewhat related (Geringer & Hebert,1991; Glaister & Buckley, 1998). Stability is moredifficult to interpret as there are multiple defini-tions used, including termination, changes inownership structure, reorganization, and renegoti-ation of contracts (Yan & Zeng, 1999). Restruc-turing of a JV often indicates that it isn’t perform-ing as planned. However, it may also simplyindicate strategic adaptation to changing eco-nomic and competitive conditions (Gomes-Casseres, 1987). Termination of a JV may noteven be an indicator of failure if one or morepartners willingly sell their equity stakes to an-other partner or external firm (Hennert, Kim, &Zeng, 1998). Also, organizations engaging inmergers and acquisitions may spin off JVs thatdon’t fit the strategy of the new parent.

Both JV and parent firm managers’ assessmentof performance is typically related to whether stra-tegic objectives are achieved. To that end, it isoften more useful to delineate measures of perfor-mance according to an assessment of process andoutcomes (Yan & Zeng, 1999). Process perfor-mance considers how well JV and parent firmmanagers deal with issues as they arise, whileoutcome performance refers to indicators such asprofitability. Arino (2003) found that process andoutcome are very different measures and thusshould be considered separately. A JV may not, forexample, be in existence long enough to achievethe strategic objectives of its parent firms and yetmanagers might still be satisfied with its processperformance. If parent firm managers are not sat-isfied with their JV’s performance, this could in-dicate a failure of the parent firms to agree onstrategic objectives or how to assess performanceon an ongoing basis, as well as deal with any other

implications that were not thoroughly consideredbefore creating the JV.

The decisions managers make regarding perfor-mance proceed as follows. First, managers mustconsider whether a JV is their best option. For aJV to be the right choice, each partner must bewilling to provide the other with access to theresources needed to fulfill its objectives. If eitherfirm is unwilling to agree to these conditions, it isprobably best if it does not even begin seeking aJV partner. In the initial stages of assessing poten-tial partners, each should fully disclose its goals. Inthis stage there is a need to determine if there isenough congruence among the partners’ differingobjectives. Firms do not necessarily need to haveidentical objectives in order to form a JV, but eachmust be willing to provide access to the resourcesnecessary for its partner to achieve its goals.

The next step is for partners to agree on how JVperformance will be assessed. This should be ex-plicitly stated in the JV contract. If disagreementsarise between the partners, either during thenegotiations or after implementation, it is rec-ommended that the default decision rule shouldbe a consideration of what is best for the JV(Beamish, 2008). When one parent attempts tomaximize its own gain without considering theinterests of the other, the long-term prospects ofa JV are poor.

In summary, there are numerous possible mea-sures of performance, and each varies in relevancedepending on the intentions of a JV’s parent firms.Managers should consider carefully how they willassess performance before attempting negotiationwith potential partners. Failure to do so may resultin substantial conflict among partners. Also, fail-ure to consider how performance will be assessedmay result in contracts that are impossible toenforce because no measurable indicator was spec-ified. Researchers should consider using multiplemeasures of performance in their research to re-flect its many dimensions3 (Hill & Hellriegel,1994).

3 Another potentially more salient implication for researchers is thatpurposive sampling may be required depending on the performance measureof interest in a particular study. Results of studies that do not consider theapplicability of the performance measure employed for the firms sampledmay be misleading.


KnowledgeManagement

Much of the research we reviewed examines theimportance of effectively managing an organiza-tion’s knowledge and capabilities, as these aresometimes its most valuable source of competitiveadvantage. Here, knowledge may refer to eitherintellectual capital such as patents or othersources of value such as customer or marketknowledge. Examples of capabilities include pro-duction processes or R&D expertise. JVs are oftenused to access new knowledge, or to profit fromexisting knowledge (Inkpen & Crossan, 1995;Shenkar & Li, 1999). Knowledge tends to flowmore freely and capabilities are developed moreeasily in IJVs than in wholly owned subsidiaries(WOSs) (Luo, 2002a). For IJVs, access to localknowledge improves JV performance (Beamish& Banks, 1987; Inkpen & Crossan, 1995; Lyles &Salk, 1996; Makino & Delios, 1996), and in thelong run, learning enhances a firm’s competitiveadvantage (Inkpen & Dinur, 1998).

Multinational enterprises (MNEs) partner withlocal firms to access market and business practiceexpertise and to develop local management talent(Beamish, 1987). To achieve this, foreign firmsmust often transfer knowledge to JVs in order toserve new markets. Fahy et al. (2000), however,found that WOSs and IJVs established in somecentral European countries were equally effectivewhen it came to transferring marketing capabil-ities to the local subsidiary. Hence, there areapparently other factors that affect organiza-tional learning in IJVs. The subsidiary’s desireto receive the capabilities, and the willingnessof the parent to provide them, may have out-weighed any advantages accruing from owner-ship structure. This is consistent with Guptaand Govindarajan (2000), who found that moti-vation to learn is one of the most important pre-dictors of learning.

The two most cited articles we reviewed exam-ined knowledge transfer and learning in IJVs (Ink-pen & Beamish, 1997; Mowery, Oxley & Silver-man, 1996). Mowery et al. (1996) found that IJVsare more effective than nonequity alliances attransferring technological capabilities. This islikely because it is much easier to transfer person-

nel directly to a JV than it is to transfer theseemployees’ tacit capabilities from one organiza-tion to another (Kogut, 1988). Likewise, Anandand Khanna (2000) found that more learningoccurs in JVs than in licensing arrangements. Webelieve, however, that the effectiveness of JVs forknowledge transfer may have less to do with levelof equity ownership and more to do with thecontribution of human talent to the JV.

While knowledge transfer is often necessary forthe success of a JV, firms may be concerned withprotecting their intellectual property and tradesecrets. Nicholls-Nixon and Woo (2003) foundthat firms using JVs in new and emerging businesssegments, where the underlying technologies areconstantly changing, actually produce fewer pat-ents. As they explained, it may be that firms aremore inclined to use JVs for riskier R&D wherethe outcomes are more uncertain. However, itmay also be because it takes longer for trust todevelop to the point where knowledge is freelycontributed to the JV. This may also explain whythe most recent advances in technology are morecommonly accessed through nonequity agree-ments with universities, research consortia, andlicensing (Tidd & Trewhella, 1997).

Inkpen and Beamish (1997) proposed that bar-gaining power shifts when valuable knowledgefrom one IJV partner is transferred to the other.This will be especially true where partners try tooutpace each other’s learning so as to gain a com-petitive advantage over each other (Hamel, 1991;Yan, 1998). In turn, this can reduce cooperationamong partners, making the JV less stable. Giventhat learning in JVs takes time and involves ad-aptation as organizations learn from prior experi-ences (Van de Ven & Polley, 1992), instability isnot desirable and may even lead to dissolution.Whether JV instability results depends on the typeof knowledge and how it is obtained, as demon-strated by the success of NUMMI, a JV formedbetween GM and Toyota (Adler & Cole, 1993).Also, while Blomstrom and Sjoholm (1999) foundthat the successful transfer of parent firm knowl-edge to the JV improves performance, Djankovand Hoekman (2000) found that the knowledgetransfer would not necessarily spill beyond the JV.

Some types of knowledge are more valuable


than others, depending on the industrial sectorsand activities a country specializes in. Chinesefirms, for example, seek to access the technologi-cal and marketing capabilities of foreign partnersmore often than they seek management skills(Shenkar & Li, 1999). Acquisition of these skillshas helped Chinese firms develop their manufac-turing capabilities and gain access to new markets.Luo (1997) found that Chinese firms seek partnerswith market experience and a superior marketposition when their goal is market expansion.Firms seeking stability and profitability, however,may prefer partners with more international ex-perience and market power.

As knowledge is transferred among partners,their capabilities may become more similar.However, the JV will perform better if eachpartner focuses on enhancing its own capabili-ties in order to complement those of its partner(Nakamura, Shaver, & Yeung, 1996). It istherefore important for firms to choose partnerswith complementary resources, capabilities, andknowledge. Trust between partners is also animportant precondition to learning as it enablesknowledge sharing. Some firms may be reluctantto share knowledge given its strategic impor-tance. Others involved in IJVs may be con-strained by parent firm managers’ preferencesfor clearly delineated roles, as opposed to inte-gration and coordination (Child & Markoczy,1993). Trust alone will not always ensure thatlearning occurs. Lane, Salk, and Lyles (2001)found that trust and support from foreign part-ners did not lead to learning in Hungarian IJVs,although it did lead to improved performance.In addition to trust, knowledge acquisition skillsmust be developed, and this requires time andthe active involvement of managers (Tsang,2002). Forming strong social ties between man-agers and developing shared values also aidspartners in learning (Dhanaraj, Lyles, Steensma,& Tihanyi, 2004; Luo, 2001). This implies thatforeign partner visits and expatriate staffing maycreate greater learning opportunities.

A clear managerial implication of this streamof research is that while JVs may allow partnersaccess to each other’s knowledge, they should notnecessarily attempt to acquire it outright. Unless

the partner has agreed to transfer this knowledge,attempts to acquire it will likely lead to conflict,which diminishes the long-term viability of theJV. Therefore, when considering the strategic ra-tionale for a JV, managers should take into con-sideration whether they want to acquire newknowledge or whether they simply need access inorder to achieve their objectives. If knowledgeacquisition is desired, a JV is not likely a stableoption.

Another issue firms should consider is activelycollecting and codifying knowledge concerningthe JV management process itself. Firms may beinvolved in numerous JVs, yet those managingthem may not be aware of the corporate experi-ence with this mode. Firms that actively overseethe JV management process may be able to de-velop core competencies by collecting, codifying,and disseminating their best practices in JV man-agement throughout the organization. Pharma-ceutical giant Eli Lilly, for example, has developeda highly sophisticated proprietary framework thatcovers every aspect of its alliance formation pro-cess (Dhanaraj, Lyles, & Lai, 2007). Such exper-tise is a major contributor to Lilly’s competitiveadvantage.

Effective knowledge management is clearly es-sential for continued business success. IJVs havelong been primary vehicles for learning andknowledge transfer, and this trend will likely con-tinue. As managing knowledge in JVs can be morechallenging than in WOSs, partners must care-fully plan the transfer of their firm’s knowledge,where to invest in order to gain access to relevantknowledge, and how to govern their knowledgeresources.

GovernanceandControl

Managing JVs can be demanding if partners havedifferent objectives (Pearce, 1997; Shenkar,1990). Governance decisions become particularlyrelevant as the terms of a JV are negotiated. De-cisions made during this period are critical, as it isusually more difficult to make major governancechanges after the JV has been implemented. Part-ners have a number of issues to consider, includingthe level of equity ownership of each and thedivision of management responsibility. The stud-


ies we discuss here examined the relationship be-tween the division of equity ownership amongpartners and JV performance.

Foreign participation generally has a positiveimpact on JV performance in emerging econo-mies, resulting from the transfer of production andprocess knowledge from the foreign parent. Ait-ken and Harrison (1999) found that foreign equityparticipation in Venezuelan JVs increased plantproductivity. Several studies examined the rela-tionship between division of equity among part-ners and JV performance, and the results appear tobe, at least in part, dependent on the context.Steensma and Lyles’ (2000) study of Hungarian-based small and medium-size enterprises (SMEs)with Western partners, for example, found thatimbalance in ownership reduces the likelihood ofsurvival. Lee and Beamish (1995), however, foundthat performance was improved when JV partnersfrom a newly industrialized country held a higherequity stake in JVs formed in other emergingeconomies. The size of equity stake firms preferdepends, among other things, on where it is es-tablished. U.S. partners of China-based JVstended to prefer a large ownership stake (Osland& Cavusgil, 1996), although this may reflect apreference for establishing a WOS.

Salant and Shaffer (1998) proposed that firmsachieve balance in governance by holding equitystakes that maximize the total return to bothpartners combined, rather than the individual re-turn for one partner. The balance of ownershipthat leads to improved performance likely dependson the resources each partner contributes and theresources of the nation in which the venture isestablished. In other words, the criticality of theresources committed to a JV affords a parent somecontrol independent of its equity share. In addi-tion, equity ownership levels may actually be re-lated to the bargaining power afforded to partnersby the resources they possess (Mjoen & Tallman,1997). However, when a firm holds a very smallequity stake in an IJV, typically less than 20%,this may signal lack of commitment and thereforeincrease the probability of failure (Dhanaraj &Beamish, 2004). Intervention by local govern-ments can also influence the bargaining power ofa firm. Brouthers and Bamossy (1997) found that

intervention in negotiations by transition econ-omy governments shifts the balance of power infavor of the local partner but not necessarily to thebenefit of the JV.

The link between equity ownership and perfor-mance is not necessarily direct. Das and Teng(1996), for example, proposed that JVs should beused primarily to enhance cooperation amongpartners, as opposed to achieving separate strate-gic goals. Goals are important for JVs, but achiev-ing them is facilitated by effective cooperation.Both Lockheed Martin and Boeing, for example,could have supplied space launch services on theirown. But by forming United Launch Alliance(ULA) to share the costs of producing expensivelaunch sites and technology, they were able tolower their prices and therefore compete moreeffectively. Therefore, forming and maintainingtrust between partners is crucial to effectively gov-erning a JV. In part, this is because governanceremains an important ongoing activity for manag-ers involving learning and sometimes even rene-gotiation (Arino & de la Torre, 1998).

A comprehensive JV contract and cooperativerelationship contributes substantially to the for-mation of trust between JV partners (Luo, 2002b).Trust, in turn, enhances satisfaction and commit-ment to the JV (Cullen, Johnson, & Sakano,1995). Yan and Gray (1994, 2001) noted that thequality of the working relationship between part-ners directly affects the achievement of each part-ner’s goals. Therefore, opportunistic behavior byJV partners will likely be detrimental (Kogut,1989; Luo, 2002b). Park and Russo (1996) foundthat external market competition between part-ners reduces the likelihood that a JV will survive.Madhok (2006) suggested that trust is so crucialfor JV success that knowledge concerning how it isestablished and maintained is of central impor-tance to JV managers.

Partners must also decide whether one partnerwill dominate the JV by taking all managementresponsibilities or whether control will be shared.Like equity level, making this decision requiresconsideration of context. Beamish (1985) foundthat shared control is preferred to dominant con-trol in IJVs involving less developed countries(LDCs), and later Beamish and Choi (2004) em-


phasized splitting control by functional expertise.Split control differs from shared control in thatpartners take responsibility for managing thosefunctions in which they excel as opposed to bothpartners sharing responsibility for all functions.Note that shared control is conceptually similar tothe matrix organizational structure. The challengeof shared control is that it increases the potentialfor conflict between the parent companies and theJV management. Luo, Shenkar, and Nyaw (2001)found evidence that U.S. partners prefer moredominant overall control of Chinese JVs, whileChinese partners instead prefer to have specificcontrol over functional areas because they aremore interested in technology transfer than over-all control. Ding (1997) further found that dom-inant foreign control improved performance ofU.S.-China JVs.

In IJVs involving developed countries, Killing(1982) suggested that shared control is actuallydetrimental to performance and should be usedonly when the resources and capabilities of bothparents are critical to the success of the venture.Yet this raises the fundamental question: Whywould one firm voluntarily enter into a JV if it didnot want the partner to provide and manage theresources and capabilities it originally sought?While the costs of coordination and control withany partner are by definition greater than wouldexist in a WOS, the benefits of having access tothe newly contributed resources and capabilitieswill typically exceed such costs in a successful JV.If the costs are expected to exceed the benefits, aJV should not be formed.

Additional considerations regarding JV gover-nance include the number of partners involved inthe JV and whether the JV is between partners atthe same or different stages of the value chain.Makino and Beamish (1998) found that two-part-ner IJVs are likely to outperform those with threeor more partners. Dussauge and Garrette (1995)reported that partnerships between firms at differ-ent stages of the value chain that start out asnonequity alliances perform better than thoseestablished as JVs. As these partnerships aretypically established to create new technology,retaining separate ownership may give suppliersadequate motivation to compete for the business

of the buyer in order to reap the benefits when thetechnology is commercialized.

In summary, it is mainly the value of the re-sources each partner contributes to a JV that de-termines the level of bargaining power, and hencecontrol, it possesses. In determining the level ofequity contributed to the JV, partners must takeinto consideration a number of factors. First, anyforeign ownership restrictions must be respected.In China, for example, it is often advisable but nolonger legally necessary to find a local partner todo business with, at least in most sectors. Second,firms in some economies may be less able to con-tribute an equivalent amount of equity, and so theforeign partner may need to increase its stake.Survival of JVs also depends on the level of com-mitment of the foreign parent, and this may besignaled by going beyond a nominal equity invest-ment. To achieve the full benefit of forming a JV,management control should usually be split ac-cording to the partners’ functional expertise. Fi-nally and perhaps most important, establishingand maintaining trust between the parents is cru-cial. Where conflict between partners arises, thebest advice is for each to consider what is best forthe JV rather than for one partner versus theother.

Internationalization

JVs are a mode of international expansion thatprovides foreign partners with access to localknowledge concerning markets and business prac-tices while allowing them to retain some opera-tional and strategic control. Nearly all the articleswe reviewed focused on or included internationalJVs. This demonstrates the prevalence and impor-tance of JVs in the global economy. A few of thearticles in our sample focused specifically on theperformance implications of firm internationaliza-tion through JVs.

When making foreign investment decisions,managers choose from a variety of options, includ-ing acquisition, establishing a new WOS or a newIJV, or taking a partial ownership stake in anexisting foreign firm. This decision may be, inpart, influenced by the resources of the firm (Hel-fat & Lieberman, 2002). Firms may form IJVs toovercome barriers to entry related to scale or scope


or to overcome their inexperience in operating ininternational markets. From a host country’s per-spective, local firms often welcome the technolog-ical capabilities and new market opportunitiesmade available by foreign partners.

The appropriateness of each mode of interna-tionalization depends on various factors, includingthe foreign firm’s host country knowledge and itsmanagerial and financial resources. Where a firmlacks local knowledge the probability of successmay be enhanced by entering the market with apartner. Local partners can provide access todownstream resources, such as marketing and salescapabilities, which the foreign partner may lack(Anand & Delios, 1997). However, if a firm doesnot require access to additional resources JVs maynot be the best mode of market entry, consideringthe additional management challenges theypresent. Woodcock et al. (1994) found that newwholly owned Japanese subsidiaries established inNorth America outperformed new JVs, which inturn outperformed subsidiaries established by ac-quisition. This suggests that most Japanese parentfirms had accumulated adequate capabilities andknowledge to serve the local market needs beforeentering. In China, on the other hand, manufac-turing JVs originally outperformed WOSs andnonequity alliances (Pan & Chi, 1999; Pan, Li &Tse, 1999), suggesting that access to local knowl-edge was critical for success. Finally, Barkema etal. (1997) found that firms with more experienceoperating JVs in their home country were ableto establish IJVs with higher survival rates. Thisis likely because experience enhances JV man-agement competencies, especially in the area ofmaintaining effective working relationships.

Emerging economies such as China continue toattract substantial foreign direct investment. Gov-ernment policy originally stipulated that all for-eign investments required a local partner, but thisdid not prevent numerous new ventures from be-ing established. Early investors were satisfied withthe performance of their JVs in China despite theownership restrictions (Davidson, 1987). Earlyentrants who made large technological transfers toChina-based IJVs tended to outperform latecom-ers (Isobe, Makino, & Montgomery, 2000; Pan,Li, & Tse, 1999).

Large MNEs from the U.S. and other nationshave a substantial portfolio of foreign invest-ments. However, SMEs headquartered in coun-tries with smaller home markets must also respondto the pressure of international competition byincreasingly investing abroad. Lu and Beamish(2001) found that SMEs with several foreign in-vestments performed better than those that wereless internationalized. Like larger firms, the moreexperience foreign SME partners have doing busi-ness in a particular country, the better their JV’sperformance in that country (Delios & Beamish,2001). Finally, Luo (2002c) found that JVs estab-lished in the same industrial sector as their parentsperformed better than those in unrelated sectors.This is likely because diversifying into unrelatedsectors through JV requires parents to developnew competencies rather than exploiting existingones.

In summary, IJVs are an important componentof a firm’s global strategy and can be a source ofcompetitive advantage. JVs aid parent firms inreducing the risk of their investments by partner-ing with firms that have more local knowledgeand international experience (Lu & Beamish,2001). It is important that managers consider thefollowing factors when selecting an internationalpartner: (a) Does the potential partner have theknowledge and experience needed to successfullyconduct business, and are they willing to provideaccess to it?, (b) What are the candidate’s goals,and are we willing to assist in achieving them?,and (c) Is the JV likely to be important for thelocal partner? If the answer to any of these ques-tions is no, the foreign partner should considerother local firms. Furthermore, the foreign parentshould determine whether the local firm has con-tinued to develop its capabilities over time. In thefollowing section, we address some of the chal-lenges of managing IJVs that result from nationalcultural differences.

CulturalDifferences

Managing IJVs may be complicated by culturaldifferences that make communication, decisionmaking, and managing personnel more challeng-ing (Child & Markoczy, 1993). JV managers mustlearn to conduct business in a country that is


foreign to at least one of the partners, and alsohow to work with a local partner (Barkema, Bell,& Pennings, 1996). Research on the impact ofcultural differences on IJV performance has pro-duced mixed results. While Barkema, Bell, andPennings (1996), for example, found that culturaldifferences could affect the long-term survival ofJVs, Park and Ungson (1997) found that U.S.-Japanese JVs actually survived longer than domes-tic U.S. JVs. Conversely, Hu and Chen (1996)found that in a sample of Chinese JVs, culturaldifferences appear to have no impact on perfor-mance whatsoever.

Inconsistencies in the results of cultural distancestudies may indicate the need for a closer examina-tion of how different cultural traits interact. Some ofthe research on cultural differences we reviewed isinspired by Hofstede (1980, 1991), who identified anumber of traits that relate to individuals’ workvalues, including uncertainty avoidance, long-termorientation, and individualism. Uncertainty avoid-ance refers to an individual’s comfort level in am-biguous situations; individuals with a long-term ori-entation tend to take implications for the future intoconsideration when making decisions and acting inthe present. Individualism refers to the extent towhich individuals prefer to do things on their ownand to have their achievements recognized and re-warded. Barkema and Vermeulen (1997) found thatwhen JV partners are based in countries with sub-stantial differences in uncertainty avoidance andlong-term orientation, the chance that the JV willsurvive is diminished. Differences in individualism,however, have been shown to improve JV profitabil-ity and productivity (Li, Lam, & Qian, 2001).

Managers need to be aware of cultural differenceswhen selecting a JV partner and negotiating terms,and in ongoing management. A partner with a lowtolerance for uncertainty will likely want the otherpartner to signal its commitment through actionssuch as increasing its equity stake and transferringnew technology to the JV. A large difference inlong-term orientation can be a problem, as emphasison short-term objectives by one partner may signal alack of long-term commitment. Here the impetus issimilar to agreeing on goals: Each partner has todecide what is most important for it and whether itis willing to allow the other partner to achieve its

own goals. In the case of individualism, a differencemay be desirable, as conflict is more likely betweensimilarly individualistic partners. Here, JV stabilityand performance may be improved by clearly delin-eating management responsibilities and deferring toa set of previously agreed-upon rules if conflict arises.Finally, issues related to cultural differences may bemitigated by training expatriate managers ade-quately before sending them on assignment to aforeign JV.

Organizational cultural differences may poseanother challenge for managing JVs. Pothukuchiet al. (2002), for example, found that JVs formedbetween Indian and foreign partners were affectedmore by differences in organizational culture thanby differences in national culture. Likewise, Feyand Beamish (2001) found that JVs with similarorganizational cultures had a higher probability ofsuccess. While these differences would also affecta merger or acquisition, they likely affect a JVmore because the two parent firms retain theirseparate management. Hence, when selecting aJV partner, managers of each parent firm shouldobserve the internal environment of the otherparent firm closely to assess the fit with their own.If it is not a close match, this should be addressedbefore proceeding with further negotiations.

Valuinga JV

When considering the formation of a JV, partnersare often mindful of the potential impact on themarket valuation of their own firm, if publiclytraded. This valuation will be, in part, affected bythe amount of information shareholders have con-cerning the pending JV, the capabilities and re-sources of the potential partner, and the governancestructure. The value of a proposed JV is often diffi-cult to assess by shareholders, especially when it ismore difficult to directly observe its performance.Hence, some researchers have studied the effect ofJV announcements and acquisitions on the marketvalue of the parent firm(s) instead. Managers ofpartner firms expect that investing financial capitaland other resources in a JV will allow them to createmore economic value than they could with ago-it-alone strategy, and research largely sug-gests this to be the case. Koh and Venkatraman(1991) found, for example, that JV announce-


ments lead to larger gains in the value of theparent firms than do technology exchanges, li-censing, or marketing and supply agreements.

Value is created in JVs by combining two ormore parent firms’ complementary assets. The in-tended result is that more value is created whenthe resources are combined than when they areseparated or accessed through another form ofcontractual agreement (McConnell & Nantell,1985; Reuer & Koza, 2000). Following the an-nouncement of the formation of a JV, any sub-stantial changes in the value of the parent firmsgives an indication of the market’s assessment ofthe JV. Factors that are found to positively influ-ence a parent firm’s market value after a JV an-nouncement include the extent to which the busi-ness line of the JV is related to that of the parentfirm, pursuit of research and development (R&D),and higher equity ownership (Merchant & Schen-del, 2000; Park & Kim, 1997).

Another way to value JVs is through changes inthe market value of a firm after it acquires the equityheld in a JV by its partners. Reuer (2001), for ex-ample, found that the market reacts positively whenU.S. firms acquire JVs with heavy investmentin R&D. However, the market reacts negativelywhen U.S. firms acquire IJVs because of the percep-tion that national cultural and political differencescould make these investments more difficult to man-age. Reuer and Miller (1997) also found that JVswith higher insider ownership result in larger stockgains for the acquiring firm. This likely reflectsshareholder beliefs that insider equity holders havebetter information about the true value of the JV. Ina sense, shareholders may feel that due diligence wasmore reliably carried out prior to the acquisition ifinside owners are involved.

JVs can be considered investments in whichloss is constrained to a fixed amount and that havethe potential to yield large returns. As with finan-cial options with high potential upside, Chi(2000) proposed that partners’ assessment of thegrowth potential of a JV is positively related to itsvalue. Reuer and Leiblein (2000), however, foundthat increasing a firm’s global reach with IJVs doesnot reduce market value loss. This suggests that,while JV valuation is initially related to growthpotential, market risk is not necessarily mitigated

through an internationally diverse portfolio ofJVs. This also implies that there is likely no alter-native to active management when it comes toenhancing JV performance.

Research suggests that JVs will be most highlyvalued when they are pursued to increase thereturns from new technology and when parentshold a meaningful equity stake. As discussed ear-lier, large equity stakes do not necessarily lead tobetter JV performance. Hence, managers shouldbe diligent in communicating their intentions toshareholders regarding how the JV will be used tocreate value. While shareholders seem to reactnegatively to the formation of JVs with interna-tional partners, this may simply reflect sharehold-ers’ lack of knowledge concerning the foreignpartner or market, and the empirically unfoundedreputation that IJVs have for higher failure ratesthan WOSs. The key to mitigating shareholderuncertainty is communication. Treating JVs asoptions may be interpreted as lack of commitmenton the part of one or more of the partners andcould lead to reduced goodwill from both currentand potential future partners.

SummaryandExtensionof JVManagementKnowledge

Figure 2 summarizes the major questions manag-ers address at each phase of designing, imple-menting, and managing a JV. The research we

reviewed and some of the inferences we havedrawn give guidance in answering these questions,although the latter are subject to further empiricalverification. There is still substantial opportunityfor researchers to examine the important decisionsmade during the initial phases of JV formation. Inthis section, we outline some areas of research thatwould benefit from more attention in the future.These include the value of case studies for gainingdeeper insights into JV management processes;JVs between nontraditional partners; the role ofmanagerial characteristics, attitudes, and experi-ence in entry mode selection and effective JVmanagement; leveraging new capabilities devel-oped in JVs; the potential overemphasis of major-ity ownership; and the influence of national eco-nomic development on effective JV management.


Currently, most studies rely on secondary datasources and surveys rather than direct contactwith JV and parent firm managers, which has afew limitations. First, research that uses secondarydata usually does not result in the depth of insightmade possible by case studies. Consider Yan andGray (1994), in which four JVs were examined indepth during the formation process. In this study,which is the fifth most cited in our sample, thescholars found that bargaining power affects own-ership structure, a result that is counter to a com-monly held assumption that ownership structurenecessarily affects bargaining power. Studies usingsecondary data likely would not have uncoveredthis finding, as data pertaining to bargainingpower and ownership structure would have beencollected at the same time. In fact, many research-ers may be inclined to use the terms ownershipstructure and bargaining power interchangeably,which Yan and Gray (1994) showed is not accu-rate.

Another limitation of secondary data studies isthe difficulty in differentiating between equityand nonequity strategic alliances. Managers ofshort-term nonequity alliances face substantially

different issues than managers of long-term equityJVs. In JVs with a long-term focus, relationshipmanagement, including building and maintainingtrust and mutual understanding, is significantlymore important than in short-term alliances. Sep-arating alliance types when studying collaborativestrategies, therefore, is important for drawing re-liable implications for JV management. Whatworks in the case of nonequity strategic alliancesmay not in JVs. Often, this distinction cannot bemade when using secondary data sources.

Finally, case studies allow researchers to trackthe development of JVs over time, which allowsgreater insight into how the dynamic interactionamong partners, stakeholders, and other environ-mental influences affects the partnering process.They clarify the challenges faced by managers indesigning a JV, pitfalls to be avoided, and man-agement techniques for resolving those chal-lenges. Consider the case of an IJV formed be-tween a diversified Malaysian company and aFinnish telecommunications company. The Ma-laysians wanted to access the Finnish digitalswitching system knowledge to fulfill a contractwith Malaysia’s national telecommunications

Figure2DecisionsMadeat EachPhaseof the JVPartneringProcess

What are our objectives?

What sort of resources do we need to achieve our objectives?

Do we want to access or acquire these resources?

Are we in this for the long or short term?

Is a JV our best option?

Does the partner have the resources we need?

Will they provide us access to the resources we need?

What are their goals?

Are their goals congruent with ours?

What are their motives?

Are we compatible?

Do they have experience in managing JVs?

Is our management in full support of the JV?

What is best for the JV?

What is the relative importance of each of our requirements?

What are the typical practices in the industry/country in which the JV is located?

How should the performance of the JV be assessed?

Is each party aware of the other’s assumptions?

What level of equity is appropriate?

Who will be responsible for managing the JV?

Are there any unresolved issues?

How do we handle disputes that may arise?

Are we learning from our JV?

How do we renegotiate terms if one or more partners think it necessary?

Are we capturing and codifying any JV management capabilities?

If the JV does not perform as anticipated, how do we turn it around?

Under what conditions should we terminate the JV?

Negotiating Terms Selecting a Partner AssessingStrategic RationaleImplementation

andManagement

Sources: Four phases adapted from Kelly and Schaan (2005). Decisions adapted from Beamish (2008).


agency. While the Malaysian partner had priorexperience with IJVs, it was still having difficultyfinalizing the deal after 20 meetings (Beamish &Ainudden, 2006). One of the main stumblingblocks, it appeared, was the lack of cultural aware-ness on the part of Malaysian managers, whomistakenly assumed that Finnish culture was sim-ilar to that of other Western countries. Otherissues included lack of preparation on the part ofthe Finns, who seemed unaware of standard indus-try practices in Malaysia, and on the part of theMalaysians, who were unaware of standard Finn-ish business practices. In-depth studies allowscholars to gain deeper insights such as these, andas a result, to provide advice to other firms con-sidering, or in the process of forming, a JV. Casestudies can also be of substantial value for firmsinvolved in JVs as they provide an opportunity togain deeper insights into their own JV manage-ment processes and their effectiveness.

All of the studies in our sample considered JVsformed between traditional business partners.While this reflects the majority of JVs, businessesare increasingly allying with nontraditional part-ners such as NGOs and universities. Partnershipswith NGOs help businesses reach some of theleast-developed nations while providing tangibleeconomic benefits to their constituents. Like-wise, partnerships with universities provide ac-cess to, and help fund, new technological de-velopments. JVs between nontraditionalpartners may face increased instability giventhat the goals of the parents differ in fundamen-tal ways. Yet many of the implications of JVresearch should still hold.

It is also important to realize that much, al-though not all, of the international research cur-rently published is implicitly biased toward theconcerns of the foreign JV partner. This bias typ-ically results from the availability of data and re-search sites. Not taking into account the local part-ner’s insight can limit a full understanding of JVmanagement processes, and so more research fromboth partners’ perspectives would be beneficial.

Most JV governance research has focused onhigh-level factors such as ownership structure anddivision of control. Research on the characteris-tics of effective JV managers could lead to valu-

able insights. It may be that the attitudes neces-sary for managing a JV are different than formanaging a WOS. JV managers may, for example,need to be more open-minded and flexible andhave less of a need for control. Research in thisarea could provide valuable insight for the selec-tion, retention, and development of top talent forJVs. This line of research could also provide ad-ditional insights into how cultural differences af-fect governance and entry mode choices. It couldpotentially provide answers about why U.S. firmsseem to prefer to invest in China with WOSswhile Japanese firms are entirely willing to useJVs.

Another factor that may contribute to manag-ers’ attitudes toward forming JVs is their priorexperiences. While experience is typically definedin current research as the number and longevity ofJVs owned by a firm, a closer examination mayreveal that managers’ specific prior experiencesaffect their willingness to form new JVs. Researchalong this line could contribute to our under-standing of what manager-specific factors influ-ence entry mode, in addition to the characteristicsof the firm and the country in which investmentis made.

If the resources contributed by two or more JVpartners are more valuable when combined thanwhen separate, it stands to reason that there is apotential for substantial capability development.This creates two potential lines of inquiry con-cerning knowledge and capability management inJVs. The first deals with how newly developedknowledge and capabilities may be leveraged inJVs and potentially by the parent firms. The sec-ond deals with how to manage a JV that becomesmore adept at creating value than its parent firms.

JV governance research often stresses the im-portance of majority ownership and underempha-sizes the potential value of 50-50 JVs. If the bar-gaining power of a JV partner is largely linked tothe value of the resources it provides, and trust iscrucial in maintaining a stable JV, then it standsto reason that a 50-50 JV could be viable. Com-mitting substantial investment to gain a control-ling 51% share in the equity may simply not beworthwhile. The long-term performance implica-tions of majority-ownership versus equal-equity


JV investment need to be studied in order todetermine whether making this additional invest-ment is justifiable.

Finally, much of the recent IJV research hasbeen conducted in China, as its rapid economicexpansion has fueled foreign investment over thelast decades. However, policies governing foreigninvestment and ownership have changed substan-tially over this time frame, and, overall, China isnow a much more open business environment.The findings of studies conducted during variousstages of development within a particular setting,such as China, are therefore subject to verificationas these environments change. Longitudinal stud-ies examining the relationship between changingeconomic and political regimes and the effective-ness of governance structures and JV managementtechniques could therefore provide insights thatare more widely applicable in developing, matur-ing, and transitional economies.

Conclusion

Our review of high-impact research on manag-ing JVs revealed a number of dominant aca-demic discussions, including the assessment of

JV performance, knowledge management, gover-nance and control, challenges associated with dif-ferences in organizational and national culture,the role of JVs in the internationalization process,and assessment of JV market value. Although oth-ers might categorize these discussions differently,our approach identifies the influences on JV per-formance that have received the most attention inmanagerial and scholarly thinking to date. Schol-ars have provided substantial guidance for thedecisions that partners must make in forming andmanaging JVs. Much work remains, of course, asthe JV structure continues to evolve, as evidencedby increasing numbers of partnerships formed be-tween nontraditional partners. Just as the globalbusiness environment continues to evolve, so toodoes the role and importance of the JV as firmsincreasingly work together to create value. Welive in a time when the global economy is increas-ingly integrated. Neither countries, nor firms, normanagers can go it alone without sacrificing theadvantages of good partnerships. Equity JVs willcontinue to matter.

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AppendixUsing the SSCI database, which we accessed through

Web of Science, we performed a search4 that returned2,458 results. We excluded nonbusiness-related topicsfrom those listed in the subject area field, including onlyacademic research articles. This left us with 1,645 results.We included articles from this set if they had been citedat least 20 times. The result was that all articles in oursample were published between 1982 and 2006. Whilethis biases our results against newer articles, it is notpossible to objectively assess what impact the newer re-search will have in the future. These restrictions resultedin a sample of 318 articles.

We reviewed each of the 318 articles to determine itssuitability based on our criteria. To be included, the articlemust have examined equity JVs, as opposed to WOSs ornonequity partnerships and alliances. It also had to includesome assessment of JV performance. We broadly definedperformance as any desirable outcome over which JV ownersand managers have control. We took this approach becausefinancial indicators typically used to measure performanceare often difficult to obtain and do not always coincide withthe intentions of the JV partners (Arino, 2003). Some of themost common indicators used include profitability, returnon investment (ROI), knowledge transfer, learning, sur-vival, and ownership stability. Upon completing this phaseof the review, our sample consisted of 86 articles that pro-vide evidence and/or conjecture regarding managementpractices that influence performance in JVs.

We next carefully reviewed each of the articles in oursample, noting whether each was empirical, a review article,or a conceptual discussion. Seventy-four of the papers wereempirical; 12 were conceptual or review papers. For empir-ical articles we recorded study design, theoretical lens, scope(international versus single country), the types and indus-

4 Our exact search term was “joint venture.”


tries of firms involved, sample size, type of performanceassessed, posited antecedents to that performance, and theassociated findings. Due to space limitations, we cannotinclude all these details here. Instead, data on the 10 mostcited studies are included in Table 2 as an illustration.

With respect to the empirical characteristics of the ar-ticles in our sample, about 8%, especially theoretical pieces,do not clearly specify whether their domain was singlecountry, international, or both. For sample size, we consid-ered only the 74 empirical papers we reviewed as this char-acteristic is not relevant for other types.

International business research leads in some areas ofmanagement research and lags in others. In JV research,international business clearly leads, as 69% of all theinfluential articles we reviewed focused on IJVs and an-other 22% included both single country and IJVs. Withrespect to sample size, 23% of this research was conductedusing sample sizes of fewer than 50 firms or managers,59% utilized sample sizes of 50 to 399, while the other18% utilized sample sizes greater than 400. Ten of thearticles report on in-depth case studies, which typicallyexamine fewer JVs.


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