Joint venture success in China: How should we select a good partner?

Abstract

The success of international joint ventures investing in emerging economies, most notably China, largely depends on the selection of local partners. This study illuminates various partner selection criteria that are important to the survival and growth of foreign companies active in China. Broadly, this study reiterates three categories of criteria: strategic, organizational, and financial. A partner with superior strategic traits but lacking strong organizational and financial characteristics may result in an unstable joint venture. The possession of desirable organizational attributes without corresponding strategic and financial competence may leave the joint venture unprofitable. A partner with superior financial strengths without strategic and organizational competencies can lead to an unsustainable venture. The managerial implications for world business managers are highlighted.