Research Article
An Empirical Study on the Characteristics and Performance of Foreign Joint Ventures
Published: January 1989 · Vol. 18, No. 2 · pp. 275-302
Full Text
Abstract
This study approached the jointness—the rational basis of international joint ventures—from an organizational behavior perspective to empirically investigate and analyze the correlations between the characteristics and performance of international joint ventures. In particular, the major characteristics of international joint ventures that had been studied individually—contribution, commitment, and control—were applied in an integrated manner to foreign joint venture manufacturing firms in Korea, and their statistically significant correlations with performance were established through hypothesis testing. The major findings were that foreign joint venture partners: (1) built mutual trust with Korean partners through sustained contributions to knowledge needs, capital accessibility, and human resource needs; (2) established mutual trust and long-term profit foundations with Korean partners primarily through participation in specialized business activities; and (3) a negative correlation was confirmed between the degree of control and performance, indicating that the more dominant the foreign partner's control approach, the lower the Korean partner's satisfaction with the profit reinvestment rate.
