Are joint venture partners more opportunistic in a more volatile environment?

Research output: Contribution to journalArticle

220 Scopus citations

Abstract

This study examines how joint venture partners' opportunism is influenced by environmental volatility in a drastically changing emerging economy. Building on transaction cost and information-processing theories, we develop the hypothesis that opportunism increases to cope with industry structural instability, information unverifiability, and law unenforceability, the three interrelated yet distinct characteristics that jointly describe environmental volatility in an emerging economy. Our analysis of 188 foreign joint ventures in an emerging market suggests that opportunism increases with information unverifiability and law unenforceability. These relationships are even stronger when joint ventures depend more on the host country environment, but weaker when joint ventures operate in faster-growing industries. Finally, opportunism is found to play a mediating role in the relationship between environmental volatility and joint venture performance.

Original languageEnglish (US)
Pages (from-to)39-60
Number of pages22
JournalStrategic Management Journal
Volume28
Issue number1
DOIs
StatePublished - Jan 1 2007

Keywords

  • Environment
  • Joint venture
  • Opportunism
  • Uncertainty

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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