Joint Venture Partners Research Articles

Creditor's Legal Protection Related to Debtor's Default in A Joint Venture Partnership

Creditor's Legal Protection Related to Debtor's Default in A Joint Venture Partnership

Political uncertainty and revenue sharing in international contracting

This study investigates a critical source of political uncertainty for foreign investors in a centralised political system: leadership turnover within local governments. Our stylised model suggests that risk-averse foreign investors, faced with this uncertainty, tend to offer a larger revenue share to their local partners in international joint ventures (IJVs). This incentivises local officials to provide the necessary authorisations and public inputs for IJVs. Using a unique Chinese dataset that links city-level leadership changes with firm-level incentive structures, our empirical analysis provides robust evidence supporting this framework.

Developing indicators for biodiversity monitoring in short rotation tree plantations

Global biodiversity loss has increased societal expectation to businesses to assess and manage their dependencies on biodiversity and transparently report their biodiversity impacts. Various global frameworks have been developed to manage risks and|or report the impacts. The metrics and indicators of the global frameworks are generic in nature and do not necessarily capture local biodiversity impacts. Stora Enso has publicly declared in our Sustainability Strategy an ambition to have a net positive impact on biodiversity. For short rotation plantations Stora Enso has set an objective to develop granular, yet practical and applicable indicators for monitoring and reporting biodiversity impacts and developments over time. The selection of indicators needs to reflect the connection between biodiversity management actions and outcomes, i.e. that: i) there are purposeful biodiversity measures in place that ii) result in monitorable outcomes. Hence Stora Enso in collaboration with the joint venture partners in Veracel and Montes del Plata has developed biodiversity indicators adapted to the local conditions for the Eucalypt plantations in Brazil and Uruguay, respectively. The overarching goal is to have indicators that reflect that the environmental and biodiversity measures that are integrated in the management of the plantations have real and measurable effects promoting landscape level biodiversity. The selected biodiversity indicators meet the following criteria: Science-based, measurable and quantifiable, reliable, recurrent, and cost-effective monitoring to follow trends over time. With biodiversity indicators in place, Stora Enso wishes to further the development of adaptive biodiversity management. This means to continuously monitor biodiversity management performance, via the indicators, to enable further adaptation and development of biodiversity positive actions. The indicators will be publicly published to provide full transparency. In preparation for launching the indicators in the fall 2023, the intention at this conference is to present the indicators and consult with the audience on their purposefulness.

Market exit and re-entry in a volatile emerging economy: a case study of Yamaha motorcycles in Pakistan

PurposeThis study aims to understand the dynamics underpinning the exit and re-entry strategies adopted by multinational enterprises (MNEs) in an emerging market, Pakistan.Design/methodology/approachThis study undertook an in-depth historical case study of Yamaha Motorcycles, which had initially entered Pakistan as a joint venture but had then exited and re-entered as a wholly owned subsidiary.FindingsThis study found that, despite its status as a market leader and one of the older players in the Pakistani market, changing market dynamics in the 2000s – especially the increased competition brought by more affordable (inexpensive) Chinese motorcycles and the weak enforcement of industrial policies – had pushed Yamaha Motorcycles to exit. Another factor that had contributed to its exit were differences in risk perception and strategies with its local joint venture partner (a Pakistani business group). Hence, both firm-level and institutional factors had played significant roles in Yamaha’s market exit. This study further found that re-entering in a wholly owned subsidiary operation mode had been beneficial for the firm, as it gained a significant market share due to its focus on innovation and on capturing a market niche, which had earlier not been its main focus. The findings also suggest that opportunity logics and multiple forms of learning can be important for a firm’s re-entry into a host market – such as experiential (i.e. learning from experience) and vicarious learning (i.e. learning from other organizations, including suppliers and competitors) in an emerging market context, in which institutions evolve amid political and policy uncertainty. Finally, this study found that exit and re-entry timing is an important factor for the development of competitive advantage in a host market.Originality/valueThis study is among the few to have investigated the exit and re-entry strategies of MNEs in emerging markets. The relatively short time during which Yamaha Motorcycles had been out of the market had benefited it on its re-entry, as the firm had been able to capitalize on its prior learning and ties to suppliers’ networks.

Hydrocarbon Extraction in the Niger Delta: Reasons for the Acute Environmental Pollution

The Niger Delta has remained the epicentre of Nigeria’s hydrocarbon exploration and exploitation activities for over six decades. During this period, operations of the oil companies have adversely impacted the environment. This is because the oil companies operations have involved unabated oil spillages and massive gas flaring. However, all these have occurred despite the existence of plethora of laws that are aimed to prevent hydrocarbon activities from impacting the environment adversely. It would seem that since oil revenues constitute the live wire of the State, its only concern is revenue generation; the cost to the environment notwithstanding. As such, the philosophy underlying hydrocarbon extraction in the Niger Delta appears based on maximum profit at minimum cost. Hydrocarbon operations are not without some pitfalls; however, the paper argues that the acute impact of oil operations on Niger Delta environment was State-created. It contends that the situation was due to the State’s sole reliance on hydrocarbon revenues to fund its budget. It argues further that the situation was compounded by the near insolvent position of the State oil company NNPC; in comparison to the oil multinationals, its joint ventures partners. As a result, hydrocarbon operations have acutely impacted the region’s flora and fauna.

Cultural bridging and the performance of international joint ventures

The existing predictions and findings regarding the effect of cultural distance on the performance of international joint ventures (IJVs) remain inconsistent. We suggest that this inconsistency is due to the lack of conceptually differentiating the cultural distance between the firm’s home country and its partner(s)’country (home-partner country cultural distance) from the cultural distance between the firm’s home country and the location of the IJV (home-host cultural distance). We contribute to our understanding of IJVs by explicitly differentiating these two types of cultural distance, and by introducing the concept of cultural bridging. Cultural bridging relates to the proportion of home-host cultural distance that is compensated by having a joint venture partner, whose home country culture is more similar to the host country culture than the MNE’s home country culture is to the host country culture. We theorize how cultural bridging affects IJV performance and how it interacts with home-partner country cultural distance and home-host cultural distance to influence IJV performance. We test our hypotheses using a sample of 1708 IJVs. We find that cultural bridging has a positive influence on IJV performance, strengthens the positive performance effect of home-host cultural distance, and reduces the negative performance effect of home-partner country cultural distance. Our findings help make sense of some of the inconsistent findings regarding the role that cultural distance plays for IJV performance.

Partners with Benefits: When Multinational Corporations Succeed in Authoritarian Courts

AbstractScholars often assume that courts in authoritarian regimes cannot credibly protect foreign investors’ interests because these institutions lack judicial independence. In this article, we construct a novel data set on multinational corporations’ litigation activities in Chinese courts from 2002 to 2017. This supports the first systematic case-level analysis of foreign firms’ lawsuit outcomes in an authoritarian judiciary. We find that foreign companies frequently engage in litigation in authoritarian courts. Moreover, we theoretically and empirically distinguish between two types of government–business ties in terms of their effectiveness in incentivizing the host state to protect foreign investors’ interests. We argue that ad hoc, personal political connections deliver only trivial lawsuit success for multinational enterprises, while formal corporate partnerships with regime insiders can lead the state to structurally internalize foreign investors’ interests. In particular, we demonstrate that joint venture partnerships with state-owned enterprises help foreign firms obtain more substantial monetary compensation than other types of multinational enterprises. By contrast, the personal political connections of foreign firms’ board members do not foster meaningful judicial favoritism. These findings are robust to tests of alternative implications, matching procedures, and subsample robustness checks. This article advances our understanding of multinational corporations’ political risk in host countries, government–business relations, and authoritarian judicial institutions.

E&P Notes (October 2022)

E&P Notes (October 2022)

E&P Notes (September 2022)

E&P Notes (September 2022)

Concurrent 12. Presentation for: Exploring the Thai and Malaysian decommissioning landscapes – identifying opportunities and challenges for Australia

Presented on Wednesday 18 May: Session 12 Due to their various economic, environmental and socio-political impacts, oil and gas decommissioning activities attract a wide array of stakeholders, including joint-venture partners, contractors, governments, environmental non-for-profit organisations, academic institutions, recreational anglers and many others. As the first wave of oil and gas decommissioning activities dawns upon the Asia-Pacific region, stakeholder impacts have begun to take shape in the form of regulatory disputes, scope changes, schedule delays and safety incidents. As part of a wider research to enhance project managers’ understanding of stakeholder impacts on oil and gas decommissioning projects in Australia, the South-East Asian landscape was explored in order to identify and highlight any challenges and opportunities that could be relevant to supporting the development of the Australian oil and gas decommissioning industry. The study finds that while nations in South-East Asia are of close proximity to each other and can easily rely on one another for resource sharing, Australia appears to be geographically isolated 'down under'. In addition, Australia currently has various legislative and regulatory barriers that limit access to readily available oil and gas decommissioning yards, facilities and resources across South-East Asia. This presentation will review these opportunities and challenges to recommend possible ways forward for the Australian oil and gas decommissioning industry. To access the presentation click the link on the right. To read the full paper click here

Institutional determinants of IJV partner choice in Europe: a host-country, a home-country or a third-country partner?

PurposeThis study aims to examine the international joint venture (IJV) partnership strategy in Europe from an institutional perspective. A firm operating in a foreign country via an IJV can partner with a local firm from the host country, a firm from the same home country or a firm from a third country. This study takes the first step in examining the determinants of these partner choices.Design/methodology/approachThis study tests hypotheses based on a data set of 637 IJVs in Europe.FindingsForeign firms are less likely to operate in a partnership with a firm from the home country or from a third country (compared to operate in a partnership with a local firm) when the host country institutions are weaker or institutional distance is larger. Also, foreign firms’ disinclination to operate in a partnership with a firm from the home/third country when the host country institutions are weaker or institutional distance is larger will diminish with greater host-country experience.Practical implicationsThis study provides important insights for firms for evaluating partner choice and potential collaborations in the European region with heterogenous institutions.Originality/valueThe partner choice among the above three forms has been neglected in the literature. This study first conceptualized that the institutional profile of the host country and institutional distance between the host country and the home country can determine the partner choice.

Developing a Conceptual Partner Selection Framework: Digital Green Innovation Management of Prefabricated Construction Enterprises for Sustainable Urban Development

Digital green innovation management activities are the core of low-carbon intelligent development of prefabricated construction enterprises (PCEs) for sustainable urban development. PCEs have to seek joint venture partners to avoid the financial risk of digital green innovation projects. The purpose of this study is to develop a conceptual partner selection framework for the digital green innovation management of prefabricated construction towards urban building 5.0. In this study, first, symbiosis theory and six analysis methods were integrated to innovatively build a 3W1H-P framework system for the joint venture capital partner selection of digital green innovation projects. Second, the dual combination weighting method was innovatively proposed to avoid subjective and objective deviation in attribute weight and time weight. Finally, empirical research was carried out to verify the scientific nature, reliability, and practicability of the framework system and selection model. The results of this study show that the framework system and selection model proposed can be used to assist PCEs to select joint investment partners of digital green and innovative projects for sustainable urban development.

Exploring the Thai and Malaysian decommissioning landscapes – identifying opportunities and challenges for Australia

Due to their various economic, environmental and socio-political impacts, oil and gas decommissioning activities attract a wide array of stakeholders, including joint-venture partners, contractors, governments, environmental non-for-profit organisations, academic institutions, recreational anglers and many others. As the first wave of oil and gas decommissioning activities dawns upon the Asia-Pacific region, stakeholder impacts have begun to take shape in the form of regulatory disputes, scope changes, schedule delays and safety incidents. As part of a wider research to enhance project managers’ understanding of stakeholder impacts on oil and gas decommissioning projects in Australia, the South-East Asian landscape was explored in order to identify and highlight any challenges and opportunities that could be relevant to supporting the development of the Australian oil and gas decommissioning industry. The study finds that while nations in South-East Asia are of close proximity to each other and can easily rely on one another for resource sharing, Australia appears to be geographically isolated 'down under'. In addition, Australia currently has various legislative and regulatory barriers that limit access to readily available oil and gas decommissioning yards, facilities and resources across South-East Asia. This article will review these opportunities and challenges to recommend possible ways forward for the Australian oil and gas decommissioning industry.

Hybrid governance of joint ventures in transitional economies: the case of Guangzhou Automobile Group in China

The conventional approach to examining firm-to-firm governance is unable to disentangle the complexity of strategies and the interplay between different actors with their corresponding rules and routines embedded within an institutional environment where the state plays as a key equity partner in joint ventures (JVs) in transitional economies. This paper proposes an analytical framework of hybrid governance to explain how an alignment of mutual interests between three groups of heterogeneous multi-scalar actors (states, local and foreign firms) facilitates technological upgrading in JVs and the establishment of local production networks in transitional economies. The case of Guangzhou Automobile Group (GAC) demonstrates how the divergent interests of various actors do not necessarily constrain the development of the JV. Under such hybrid governance, whereby the boundaries between public and private property are blurred, GAC’s senior managers have been able to navigate and align the multifaceted agendas of various actors: from the profit-maximization demanded by foreign JV partners and industrial development commanded by the central state, to the development of the local capacity and capability for large-scale production and product development and setting up local automotive supply chains required by the local state. Three necessary conditions for technological upgrading in JVs are identified: a 50-50 equity structure, a latecomer in a big market, and the financial imperative of local firm actors.

Partner Fit between Partner Firms and IJV Performance: A Non-linear Relationship

Purpose This study analyzes the effect of partner fit between international joint venture (IJV) partners on IJV performance as a nonlinear relationship. Design/Methodology/Approach A survey was conducted on international joint venture companies belonging to the manufacturing industry in Korea formed between Korean and foreign companies, and multiple regression analysis was conducted. Findings As a result of empirical analysis, it was confirmed that there was an inverted U-shape relationship between partner fit and IJV performance. Research Implications This study suggest that partner fit has a positive effect on IJV performance to a certain level, but excessive partner fit may lead to a decline in IJV performance because over-embeddedness hinders new learning and innovation between partners.

Improving the Joint Venture Relationship and Working Culture in the Nigeria Oil & Gas Industry

The focus of this research is to investigate the working culture and the relationship between joint venture (JV) partners in the Nigerian oil industry and its impact on JV project performance. The major international oil companies (IOC) having JV with the Nigeria National Petroleum Company (NNPC) in Nigeria are ExxonMobil, Royal Dutch Shell, Total, Chevron, and ENI. An organizational working culture can be said to be the organization’s belief system, thought processes, the attitude of the employees, their ideologies, and the organizational principles of doing things. The research methodology used is a qualitative questionnaire based on a systematic random sampling of targeted participants both in and out of the Nigerian oil and gas industry. The research analyzes the root cause of the inefficiency experienced in the Nigerian oil industry, which is responsible for JV project delays, recent divestment by the IOCs, frequent community-related work stoppages at JV project sites, sabotage of oil pipelines, and the un-restfulness in the Niger Delta area. The research work is intended to inform the need for cultural change in JV operations in Nigeria oil and gas industry by providing information on the existing JV working culture, partners relationship under the current joint operating agreement (JOA) vis a vis best global practices and to make recommendations to the Nigerian populace especially the new board of director that will be appointed early 2022 following the new petroleum industrial bill (PIB) that has just been signed into law. This article is to provide information for the required restructuring and define the effective and efficient relationships and working culture under a new JOA. The result obtained established the fact that the existing working culture and relationship between the JV partners in the Nigerian oil and gas industry are not only unsustainable but unfit to deliver individual or joint venture interest. The JV operations must be incorporated as a legal entity having its own organization, dedicated management, and a workforce that will develop a positive working culture focused on achieving the JV goals and objectives.

How can Carphone Warehouse ensure successful cooperation with its joint venture partner Best Buy in the European market?

Fitting accomplice determination is an essential worry for organizations who need to address material manageability issues through cross-area organizations. Be that as it may, the ebb and flow research on materiality examination and accomplice choice is still in the early transformative phase. This paper adds to understanding accomplice choice by corporates through an inside and out investigation of the business' determination of philanthropic association (NPO) accomplices, in light of contextual analysis exploration of Northumbrian Water Ltd. (NWL), a UK private area association giving water supply and sewerage administrations. Utilizing the proof from this review, we propose a system for the determination of accomplices in light of the imminent effect of cross-area organizations on material maintainability issues. Our paper likewise gives a helpful tool stash to organizations to assess these forthcoming effects. The structure shows the way that materiality as for maintainability issues can be surveyed both responsively and proactively, and how this appraisal can all the more likely illuminate the accomplice choice interaction by corporates. This comprehension of how materiality is evaluated and accomplices are chosen by and by is upheld by a setting explicit model and adds to information and practice of materiality examination as well as cross-area organizations

The Impact of Private Sector Participation in the Operations of Nigerian Ports Authority within the Context of Nigeria’s PPP Legal Framework

The Nigerian Ports Authority (NPA) has always prided itself as the gateway to Nigeria’s economy. Conscious of its role to the national economy, it has over the years embarked on system reforms that progressively saw to private sector investments in its terminals, equipment and services. It utilized management contracts, joint venture partnerships, concession arrangements and amortization programmes, among diverse private sector participation models, for a more effective and efficient port operations. The glaring hypothesis is that in spite of these efforts, cargo handling has remained outrageously expensive with its corresponding spiral effect on the cost of goods to ultimate consumers. The fundamental issue, which this paper seeks to identify, is the impact or otherwise of the port reforms to the immediate and remote port’s stakeholders. Using the doctrinal method of research, the paper utilized primary and secondary sources that includes information from journals, conference papers, newspaper articles and internet searches to trace the evolution of port reforms, identify the different methods of private sector investment in ports infrastructure and services, and consider the impact of the reforms to the overall efficiency and effectiveness of the port system. The paper found that the impact of the port reform was a mixed bag as the cost of cargo handling is outrageously expensive to make cost of goods unaffordable to ultimate consumers. It therefore recommended that PPP risk assessments and analyses should be more comprehensive to include transport value chain and macroeconomic forecasts; the legal framework should be amended to accommodate more innovative PPP models; the institutional framework should have the capacity to insulate transactions from political interference and official corruption; and that Federal agencies operating in the ports should be streamlined while critical ports activities should be automated to a single window so as to reduce human interventions. These recommendations, if implemented, could achieve the national aspiration of creating a preferred maritime hub in Nigeria’s ports.

E&P Notes (November 2021)

E&P Notes (November 2021)

Development Strategy of a Car Manufacturing Company in the Russian Car Market at the example of Sollers PJSC

The article analyses the dynamics of development of the Russian market of passenger cars and light commercial vehicles, investigates the strategy and competitive advantages of Sollers group of companies, which is successfully operating despite volatility of development of the Russian car market, as well as the need for a radical renewal of the model range of the company’s cars, the presence of excess production capacity and the departure from Russia of three foreign partners of Sollers group of companies in joint ventures: Fiat, SsangYong and Ford. Particular attention in the article is paid to Ford, a joint venture partner with Sollers PJSC, which left the Russian domestic market in 2019. This event, which had a negative impact on partners and clients of the company, was caused by severalcircumstances. Besides, the article identifies the main directions of development of joint ventures Mazda Sollers and Ford Sollers (in terms of Ford Transit minibus, the only locally manufactured Ford model) and the possibility of expanding their export potential, including due to export of engines, spare parts and components.The article pays close attention to introduction of new technologies in Sollers PJSC and other companies, development of digitalisation in development and production of new models, creation of its own telematics platform that allows to connect a car to the Internet and control it remotely, including starting the engine.The author examines in detail a new consumption model in the car market associated with refusal of buyers to own a car and with emerging choice of new services regarding subscription and exchange of cars, their development in foreign and domestic markets, as well as offers the analysis of successes and failures of foreign automakers in providing subscription services.The main purpose of the article is to study the strategy of Sollers PJSC in the domestic and foreign markets, auxiliary purposes refer to the analysis of the domestic market, change in the consumption model and provision of new services, study of reasons for departure of foreign partners of the company.