Predicting the Performance of International Joint Ventures: An Investigation in China*

Abstract

ABSTRACTOrganizational learning, resourcing and control have been identified in the literature as potential firm‐level influences on the performance of international joint ventures (IJVs). The study reported here examines the impact of these factors on the performance of Sino‐foreign IJVs. Their performance is assessed in terms of both ‘goal’ and ‘system’ criteria. The hypothesized performance determinants are found to be more strongly associated with variance in system performance than in goal performance. The main performance predictors are the parent companies’ experience with international business and joint ventures, and the quality of resources they provide to the joint ventures in respect of capital investment, new facilities and operational inputs. When good quality resourcing is provided, the sharing of control with local partners also predicts higher IJV performance. The performance effects of these factors appears to be cumulative, implying that further research should examine them together rather than singularly.