Partnering strategies and performance of SMEs' international joint ventures

By J. Lu, Paul W. Beamish. 2006

307 citations recorded by the source corpus.

Abstract The international joint venture (IJV) is an important mode in the internationalization of small- and medium-sized enterprises (SMEs). Internationalization in turn is an entrepreneurial behavior in the pursuit of growth. Partnering strategies in the formation of IJVs can have significant effects on the outcome of SMEs' international expansion. In this study, we examine the performance implications of two types of resources contributed by SMEs' IJV partners, host country knowledge and size-based resources. We develop and test three sets of hypotheses about the longevity and financial performance of a sample of 1117 international joint ventures established in 43 countries by 614 Japanese SMEs that have fewer than 500 employees. Our findings indicate that SMEs' IJVs with local partner(s) may be associated with decreases in longevity, especially when SMEs acquire host country knowledge. The host country experience of Japanese partner(s) does not have any direct effects on IJV profitability but reduces the longevity of IJVs. Finally, the size of Japanese partner(s) increases the longevity of IJVs but may have negative effects on IJV profitability when large Japanese partners have low equity ownership in IJVs. Our findings highlight the differential effects that IJV partners' experience-based and size-based resources have on IJV performance. Our findings also demonstrate that the same strategy could have different effects on different dimensions of performance.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/90c39b62ba0d704ff1ca79eba6b624ccb2a34fd2

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

Advancing Firm Growth Research: A Focus on Growth Mode Instead of Growth Rate (2010, background): “The majority of joint venture research, in the context of growth, involves entering into joint ventures as a method for entering new foreign markets (Lu & Beamish, 2006; Zahra, Ireland, & Hitt, 2000).”
Strategic goal accomplishment in export ventures: the role of capabilities, knowledge, and environment (2018, background): “…insure shipments, deal with reverse-logistics, etc.) and market- specific knowledge of foreign institutions and business practices (e.g., trustworthiness of specific intermediaries, import documentation requirements, taxation collection mechanism, etc.) (Fang et al. 2007; Lu & Beamish 2006).”
The Past and the Future of International Entrepreneurship: A Review and Suggestions for Developing the Field (2009, background): “…Leiblein and Reuer (2004) Leonidou (2004) Levesque and Shepherd (2004) Li, Li, and Dalgic (2004) Liesch and Knight (1999) Lu and Beamish (2001) Lu and Beamish (2006) Luthans and Ibrayeva (2006) Mascarenhas (1999) Mathews and Zander (2007) McDougall and Oviatt (1996) McDougall and Oviatt…”
How do new ventures grow? Firm capabilities, growth strategies and performance (2009, background): “Earlier studies in the strategic management and entrepreneurship literature have established the direct strategy–performance link while recognizing the contingent effect on the relationship (Lu & Beamish, 2006; McDougall et al., 1992).”