Partnering with foreign businesses: perspectives from Chinese firms

Abstract

This study examines what Chinese firms are looking for from foreign partner contributions. It identifies strategic, organizational, and financial attributes that are important to Chinese business satisfaction with the performance of international cooperative ventures (ICVs). It finds that a foreign partner's strategic attributes, namely technological capability, foreign market power, and international marketing expertise, and its organizational attributes, including managerial skills and organizational reputation, are positively associated with ICV performance as perceived by Chinese firms. By contrast, financial attributes are not important to Chinese partners. Different from foreign firms in organizational contingencies and institutional constraints, Chinese firms are asymmetrical with foreign firms in terms of strategic needs for ICV formation and partner selection criteria. They select foreign partners based upon market expansion and knowledge acquisition considerations rather than transaction cost concerns.