The Decline of Emerging Economy Joint Ventures: The Case of India

Abstract

Emerging economies such as India have become an increasingly important part of the global business landscape. Until recently, multinational corporations (MNCs) relied on joint ventures (JVs) with local companies to exploit these business opportunities. Lately, however, there has been a marked reduction in the formation of new JVs between MNCs and local companies. Moreover, many earlier JVs also are increasingly being terminated, often with great acrimony. This article highlights how ''regulatory liberalization of the business environment in India has played a big role, directly and indirectly, in driving this change. It also demonstrates how three other factors, namely resource complementarity (or lack thereof) between the race to learn between partners, and returns to globalization to MNC partners are affecting the formation of JVs in an increasingly liberalized environment.

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