Partnering with foreign firms: How do chinese managers view the governance and importance of contracts?

Research output: Contribution to journalArticle

41 Citations (Scopus)

Abstract

It is a widespread perception that the role of contract in Chinese society is limited because obligations often derive from personal relationships. It is not clear how Chinese managers view the governance and importance of contracts when they deal with foreign counterparts in their joint ventures. To addresses this issue, this study proposes and verifies the governance structure and performance implications of interpartner contracts in a setting of international joint ventures (IJVs). Extant research on IJVs has extensively examined IJV performance but inadequately assessed how this performance is influenced by contractual design. Our analysis of 114 sample IJVs in China suggests that the governance structure of an IJV contract includes four dimensions, namely, issue inclusiveness, term specificity, contingency adaptability, and contractual obligatoriness. Each of these dimensions is validated to be important to IJV formation, interpartner cooperation, and process efficiency as perceived by Chinese managers working in IJVs.

Original languageEnglish (US)
Pages (from-to)127-151
Number of pages25
JournalAsia Pacific Journal of Management
Volume19
Issue number1
StatePublished - 2002

Fingerprint

Governance
Chinese managers
Partnering
International joint ventures
Foreign firms
Governance structure
Obligation
Joint venture performance
Personal relationships
Joint ventures
Inclusiveness
Specificity
China
Contingency
Adaptability
Process efficiency

Keywords

  • Contract
  • Joint venture
  • Performance

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)
  • Business and International Management

Cite this

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