Knowledge transfer in international joint ventures in transitional economies: The China experience

Abstract

Executive Overview China is one of the fastest growing economies in the world. A major factor in the country's economic development has been the large number of international joint ventures established within China in recent years. Although China is now the world's most active joint venture market, satisfaction with the performance of many international joint ventures in China is declining. This can be traced in part to the inability of many firms to properly assess their knowledge acquisition goals within the joint venture. Western partners' new information needs differ substantially from those of their Chinese counterparts. As a result, the joint venture partners may judge the success of their venture from vastly different points of reference. These differing goals do not automatically lead to joint venture dissatisfaction, nor do the differences necessarily need to be eliminated. Rather, the characteristics and needs of both the joint venture itself and of each partner should be studied in tandem to determine when a joint venture should devote consequential resources to meeting these knowledge acquisition goals, and when such allocation is likely to be unproductive. The application of such a contingency model to knowledge acquisition ultimately will help increase the satisfaction among international joint venture participants in China.