Resource diversity in cross-border joint ventures and performance implications

Abstract

Prior studies, which consider the role of resources in strategic alliances in general and joint ventures in particular have typically focused on the limited physical aspects of a firm. In this study, I base my theoretical framework on the resource-based view and the social capital theory. I examine the effect of diversity of resources, in other words the variety or mix of different kind of resources, which constitutes both physical and social dimensions, on the performance consequences of domestic and international joint ventures. Data were collected on 117 equity joint venture activities in the pharmaceutical, semiconductor, and computer industries over a span of 15 years (1996-2010). The results of this study show that joint venture performance is enhanced under conditions of ownership equity, non-cultural, structural and status diversity. The relationship between cultural diversity and alliance performance improves when joint venture partners share similar business domains and goal orientations. The findings of this study shed light on the important factors that may help or hinder joint venture performance. I conclude with implications for joint venture theory and practice.