Product diversification in international joint ventures: Performance implications in an emerging market

Research output: Contribution to journalArticle

110 Scopus citations

Abstract

This study extends product diversification research to a new organizational form (IJV) and a new environmental context (emerging market). It explores the extent to which product relatedness with both foreign and local parents affects IJV performance as perceived by venture managers. After controlling for relevant variables, analysis of the data containing 134 IJVs in China validates our major premise: the relatedness of an IJV's products with that of its foreign and local parents is positively associated with its performance. An IJV maintaining bilateral related diversification (i.e., with both parents) performs better than a venture maintaining a unilateral related linkage (i.e., with one parent), which in turn outperforms an IJV which is unrelated to either parent. When resource complementarity or goal congruity between parents is higher, there is a stronger positive relationship between product relatedness and IJV performance. When structural opportunities are fewer or institutional deterrence is higher, there is a weaker positive relationship between product relatedness and IJV performance.

Original languageEnglish (US)
Pages (from-to)1-20
Number of pages20
JournalStrategic Management Journal
Volume23
Issue number1
DOIs
StatePublished - Jan 1 2002

Keywords

  • International expansion
  • Joint venture
  • Product diversification

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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