Relationship of Age to Trust, Commitment, and Learning in International Joint Ventures

Abstract

Strategic alliances between multinational organizations have been prevalent for more than half a century. These alliances are costly to enter and yet, have a history of failure. International Joint Ventures (IJVs), which is a type of strategic alliance, has been an important mode of entry for companies aiming to operate in foreign markets. However, companies have been guarded of forming an IJV due to their high failure rate. Despite their shortcomings, joint ventures are valuable for several reasons, including sharing resources, gaining access to potentially closed markets, and learning complementary skills from the venture partner. However, he age of the alliance (or venture) is an important element in assessing whether the partners achieve their goals. This study looks at the relationship between the age of the joint venture, trust, commitment, and learning effectiveness in Indian international joint ventures. Results show that age of the joint venture is positively related to trust between partners, commitment to the venture, and learning that takes place as a result of the venture.