Direct Competition, Number of Partners and the Longevity of Stakes in Joint Ventures

Zusammenfassung

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In this paper, the researchers draw attention to the interaction between the number of partners and the direct competition between these when explaining the longevity of stakes in joint ventures (JVs). The researchers argue that increases in the number of partners have a positive effect on the longevity of stakes in JVs only when all of these are competitors, especially if the JV includes marketing activities. In contrast, if not all of the partners are competitors, the effect of the number of partners will be the opposite. The researchers' hypotheses are empirically tested via several estimates of proportional hazard regressions, using a sample of JVs carried out by Spanish firms. The results allow them to shed light on the influence of the number of partners on the longevity of stakes in JVs. Specifically, the contradictory results obtained in prior research may be explained by the moderating role that competition among the partners plays.

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Auszug

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Direct Competition, Number of Partners and the Longevity of Stakes in Joint Ventures

Introduction

What are the determinant factors of the duration of strategic alliances between firms? Numerous studies have been carried out with the aim of answering this research question, mainly in the field of JVs (Kogut 1989, Blodgett 1992, Barkema et al. 1996, Park/Russo 1996, Park/Ungson 1997, Delios/Beamish 2001, Hennart/Zeng 2002, among others). Initial research was aimed at analyzing JV performance, simplistically considering (Gomes-Casseres 1987) JV duration or instability to be good proxies of its performance. Later on, the study of JV longevity became a research question per se, constituting a field of study in its own right. At the same time, researchers began to use more precise statistical techniques, such as econometric duration models. Numerous empirical studies have tried to analyze the impact on JV longevity of factors such as cultural distance (Barkema et al. 1996, Barkema et al. 1997, Barkema/Vermeulen 1997, Park/Ungson 1997), experience - either in the host country of the venture or in the management of alliances - (Li 1995, Barkema et al. 1997, Delios/Beamish 2001), the number of partners (Park/Russo 1996, Hennart/Zeng 2002), the share of equity (Blodgett 1992, Pennings et al. 1994, Park/Russo 1996, Park/Ungson 1997, Dussauge et al. 2000, Hennart/Zeng 2002), previous alliances among the partners (Kogut 1989, Park/Russo 1996, Park/Ungson 1997) or size (Barkema et al. 1997, Hennart et al. 1998, Delios/Beamish 2001, Hennart/Zeng 2002). Table 1 synthesizes the results of the main empirical studies based on duration models, highlighting the evidence for the analyzed factors. It can be seen that for certain factors the empirical results have not been conclusive and have even been contradict...

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