Distinctive Feature of Domestic and International Joint Ventures

By Llaneza, Ana Valdex; Garcia-Canal, Esteban | Management International Review, January 1998 | Go to article overview

Distinctive Feature of Domestic and International Joint Ventures


Llaneza, Ana Valdex, Garcia-Canal, Esteban, Management International Review


Introduction

The joint venture has been one of the contractual forms most frequently used in strategic alliances (Marity and Smiley 1983, Ghemawat et al. 1986): two or more firms agree to set up a new entity, owned by them, to carry out some activities in which they are interested, although not necessarily for the same reasons.

The research on joint ventures is twofold: the study of domestic joint ventures - all partners with the same nationality - and international joint ventures - set up by partners of different nationalities -, the latter having been the most widely analysed. Although all of them participate of the same organizational structure, the aspects and problems studied differ greatly. The literature on international joint ventures, either in developed or less developed countries, analyse them as a means to put the international strategy of the firm into practice. The literature on domestic joint ventures has revealed that their formation contributes to restrict competition or to facilitate the transfer of technological knowledge.

Such circumstance has led us to think that the nationality of partners is not the only difference between domestic and international joint ventures: it seems that the decision to choose a domestic or international partner is influenced by the goals sought with the alliance. The hypothesis that we want to verify in this paper is whether the domestic or international character of a joint venture conditions its other features so that each type shows a visibly differentiated profile. The interest of the work is twofold: from the point of view of research on joint venture issues, it allows to contrast whether significant differences exist between them which justify the separate treatment they have received. From the point of view of the practice of management, the recognition of the distinctive features of domestic and international joint ventures will allow to identify the managerial problems and singularities affecting these companies, so that some practical recommendations for their management could be made.

In order to do that, we compare two data bases which include joint ventures created by Spanish firms. The first one - DB1 - has been built through the collection of news published by the economic press, and it comprises domestic and international joint ventures. The second data base - DB2 - consists of the joint ventures established by firms subsidized by the "Instituto de la Pequena y Mediana Empresa Industrial" (IMPI) (Institute of Small and Middle Sized Industrial Firms), a public institution which depends on the Spanish Ministry of Industry and Energy. All joint ventures collected in this data base are domestic.

The structure of the paper is as follows: in the next section we offer a brief summary of the literature on domestic and international joint ventures. In section 3 we describe the main differences between domestic and international joint ventures resulting from the analysis of the above mentioned data bases. Finally, in section 4 we summarize and discuss the main results.

International and Domestic Joint Ventures

According to the literature on joint ventures, the main reasons given for their setting up are the following:

* Improvement of efficiency. The creation of a joint venture permits to achieve greater efficiency in the performance of certain tasks. This efficiency may derive from economies of scale and scope which are difficult to accomplish by a single firm, from the spreading of risks among partners, as well as from synergies which stem from the complementarity of the resources provided by the partners (Gullander 1976, Harrigan 1985, Contractor/Lorange 1988).

* Learning or access to knowledge. In joint ventures every partner has access to the knowledge and skills of the others. For example, when entering foreign markets, a local partner provides the joint venture, among other aspects, with a good knowledge of this market as to special needs of customers, channels of distribution available or the political situation of the country (Killing 1983, Berlew 1984, Schillaci 1987). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Distinctive Feature of Domestic and International Joint Ventures
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.