International joint venture partner origin, strategic choice, and performance: A comparative analysis in an emerging economy in Africa

Abstract

This study examines the competitive strategic choices of international joint ventures (IJVs) and their performance implications in a low-income emerging economy in Sub-Saharan Africa — Ghana. Using the resource-based view of the firm, it is argued that IJVs with partners from emerging economies are more likely to pursue an efficiency-oriented business strategy to strengthen their strategic positioning, competitiveness and performance. Conversely, IJVs with partners from advanced industrialized economies would be more likely to pursue a market effectiveness-oriented strategy to strengthen their strategic positioning, competitiveness and performance. The findings from 76 IJVs offer support for the hypothesized relationships. IJVs with partners from emerging economies implementing an efficiency-oriented strategy of cost leadership outperform those with partners from advanced industrialized economies implementing the same strategy. In contrast, IJVs with partners from advanced industrialized economies implementing a differentiation strategy outperform those with partners from emerging economies implementing a differentiation strategy.