Abstract
This paper identifies and explains the key strategic motives for joint venture (JV) formation by Taiwanese partner firms investing in China. The leading strategic motives are concerned with economies of scale and cost reduction in order to improve the relative competitive position in the international market and to obtain fast entry into the Chinese market. The paper also examines selection criteria adopted by Taiwanese firms when selecting IJV. This analysis distinguishes between task-related and partner-related selection criteria. The paper further considers the relationship between selection criteria and strategic motives by examining a multiple regression model using the factors of selection criteria and the factors of strategic motives as dependent and independent variables respectively. There is some support for the hypothesis that the relative importance of the selection criteria applicable to Taiwanese partner firms tends to vary with the relative importance of the strategic motivation for JV formation. The paper relates findings to previous studies on strategic motives and partner selection and considers the implications of the findings for practice.
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