Article2001

Product diversification in international joint ventures: performance implications in an emerging market

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International Business and FDI Innovation and Knowledge Management Business Strategy and Innovation

Abstract

Abstract This study extends product diversification research to a new organizational form (IJV) and a new environmental context (emerging market). It explores the extent to which product relatedness with both foreign and local parents affects IJV performance as perceived by venture managers. After controlling for relevant variables, analysis of the data containing 134 IJVs in China validates our major premise: the relatedness of an IJV's products with that of its foreign and local parents is positively associated with its performance. An IJV maintaining bilateral related diversification (i.e., with both parents) performs better than a venture maintaining a unilateral related linkage (i.e., with one parent), which in turn outperforms an IJV which is unrelated to either parent. When resource complementarity or goal congruity between parents is higher, there is a stronger positive relationship between product relatedness and IJV performance. When structural opportunities are fewer or institutional deterrence is higher, there is a weaker positive relationship between product relatedness and IJV performance. Copyright © 2002 John Wiley & Sons, Ltd.

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References

1991Firm Resources and Sustained Competitive Advantage 2004Firm resources and sustained competitive advantage 1997Dynamic capabilities and strategic management 1984A resource‐based view of the firm 1991Exploration and Exploitation in Organizational Learning 1986Self-Reports in Organizational Research: Problems and Prospects 2011External Control of Organizations: Resource Dependence Perspective 1992Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology

Cited by

2018Business group reputation and affiliates’ internationalization strategies 2009Performance of International Joint Ventures: What Factors Really Make a Difference and How?2010The effects of absorptive and joint learning on the instability of international joint ventures in emerging economies 2010Dynamic capability and IJV performance: The effect of exploitation and exploration capabilities 2009Meta-analyses of International Joint Venture Performance Determinants 2008The Contingent Value of Local Partners' Business Group Affiliations

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