Knowledge Creation in International Joint Ventures in Emerging Economies: Performance and Opportunities

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Abstract

Entering and developing presence in emerging economies often require foreign firms to set up International Joint Ventures (IJVs) with local partners, especially when the prime motive of the operation is to capture opportunities in the local markets (Mohr & Puck, 2005). IJVs have therefore become an important way for firms to enter these markets and a significant force in shaping a firm’s global strategy in expanding international activities abroad. However, research has shown that IJVs in emerging economies are unstable, and firms have experienced that performance of their IJVs in these emerging economies often does not meet their expectations (Fang & Zou, 2010). Extant research has shown that, in general, management of IJVs appears to be a difficult issue. 60-70% of all partnerships are not successful (Lambe, Spekman, & Hunt, 2002). Inter-partner learning has been proposed in the literature as a major cause of IJV instability (S. H. Park & Ungson, 1997). Yet current research indicates that when IJV partners engage in joint learning to create new IJV-specific knowledge that benefits both partners it stabilizes and sustains the IJV (Fang & Zou, 2010). For instance, Fang and Zou (2010) have demonstrated that creation of new IJV-specific knowledge can be imperative to performance while Pak, Ra, and Lee (2015) demonstrated that IJV parents can become beneficiaries of collaborative sensing and seize the market opportunities (Johanson & Vahlne, 2006). However, inter-organizational knowledge creation processes in IJVs have rarely been examined (Pak et al., 2015) especially not in the context of IJVs in emerging economies. This paucity of studies concerning knowledge creation and inter-organizational learning in IJVs have been noted at a critical research gap in the literature (J.-Y. Park, Ha, & Lew, 2015). The purpose of the paper is thus to investigate the antecedents to the superior performance of IJVs in emerging economies by identifying conditions that enable knowledge creation processes.
Original languageEnglish
Publication date7. Oct 2016
Number of pages6
Publication statusPublished - 7. Oct 2016
Event42nd Annual Conference of the European International Business Academy - Vienna University of Economics and Business, Wien, Austria
Duration: 2. Dec 20164. Dec 2016
Conference number: 42
http://eiba.wien/

Conference

Conference42nd Annual Conference of the European International Business Academy
Number42
LocationVienna University of Economics and Business
Country/TerritoryAustria
CityWien
Period02/12/201604/12/2016
Internet address

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