Performance implications of capability exploitation and upgrading in international joint ventures

Wu Zhan, Yadong Luo

Research output: Contribution to journalArticle

43 Scopus citations

Abstract

This study investigates (1) how capability exploitation and capability upgrading are associated with IJVs' financial and competitive outcomes in an emerging market, and (2) how environmental dynamism (the key construct characterizing an emerging market) and interpartner cooperation (the key construct describing an IJV) moderate the effect of capability exploitation and upgrading on IJV performance. Results suggest that IJVs in a foreign emerging market tend to perform better in both financial and competitive terms when they possess greater abilities to exploit current resources contributed by foreign and local partners and to continuously upgrade and develop new capabilities. The contribution of capability exploitation and upgrading to IJV performance is stronger when IJVs operate in a more dynamic environment. When interpartner cooperation is superior, capability exploitation plays a bigger role in improving performance.

Original languageEnglish (US)
Pages (from-to)227-253
Number of pages27
JournalManagement International Review
Volume48
Issue number2
DOIs
StatePublished - Apr 1 2008

Keywords

  • Capability exploitation
  • Capability upgrading
  • China
  • Dynamic capability
  • International joint venture
  • Organizational learning

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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