Control in Japanese–Chinese Joint Ventures: Antecedent Factors and Effect on Performance from the Japanese Viewpoint

Abstract

The relationship between ownership, control, and performance has been the focus of most previous research on international joint ventures (IJVs). However, there has been little empirical and systematic study on this topic in the context of Japanese–Chinese joint ventures (JVs). Based on data collected from Japanese managers, this study reconfirms that ownership ratio is the foremost determining force for control in IJVs. At the same time, with the inclusion of additional factors that, although not necessarily having a legal basis, are important in international management of parent firms, this paper finds that interdependence in physical-process resources between parent firms and JVs and strategic monitoring by the parent firms are also significant factors for control. As for the relationship between control and performance, this paper divides IJV performance from the Japanese perspective into two kinds, export- and local-oriented, and finds that control by Japanese parents is significantly linked to the former, but not the latter, indicating that the prominence of control is contingent on the parent firm's distinct objectives at the IJV.