Selected empirical studies on IJV dissolution with differentiation of termination outcomes
| Termination modes | Explanatory variables | Theoretical background | Focus of the study | Empirical findings | |
|---|---|---|---|---|---|
| Dussauge et al. (2000) | Acquisition, dissolution | Endogenous (relatedness of IJV partners) | RBV, TCE | Examine the performance and duration of scale vs. link alliances | Technically oriented link alliances are more likely to be acquired than scale alliances |
| Hennart (1998) | Sell off vs. liquidation | Endogenous and exogenous (ownership, length of experience, relatedness, establishment mode, parent firm size, industry growth) | TCE | Compare the longevity of stakes in joint ventures vs. those in wholly owned subsidiaries while distinguishing between two types of exit (sell off vs. liquidation) | Japanese firms more likely to terminate their stakes in U.S. joint ventures than in wholly owned subsidiaries |
| Hennart and Zeng (2002) | Sell off vs. liquidation | Endogenous and exogenous (Cultural distance, industry growth, change in the exchange rate) | TCE | Compare the longevity of Japanese-American JVs vs. Japanese-Japanese JVs | Longevity of Japanese-American JVs is shorter than that of Japanese-Japanese JVs for dissolutions that result from the sale of the venture to one of the partners, not for those due to liquidation or sale to a third party |
| Kogut (1988b) | Acquisition (incl. acquisition by third parties, dissolution) | Endogenous and exogenous (dominant control, size differences, industry concentration, partner's market access) | TCE, strategic behavior, organizational ecology | Examine the termination rates of domestic vs. international joint ventures | Instability peaks in year 5 and 6. The rates of termination through acquisition are more stable than the rates of termination through dissolution |
| Kogut (1991) | Acquisition (acquisition and dissolution are contrasted in a post-hoc test) | Exogenous (unexpected increase in the value of the IJV and the degree of concentration in an industry) | Options logic | Examine what factors increase the likelihood of acquisitions while differentiating acquisitions from dissolutions | Unexpected increases in the value of the venture and the degree of concentration in the industry affect the likelihood of acquisition |
| Mata and Portugal (2015) | Closure, acquisition | Endogenous (whether Joint ventures were created from an already existing firm, initial equity share, change in equity share, use of knowledge assets, JV size) | No explicit reference to a specific theory | Examine the effects of several factors on IJV closure and acquisitions | Acquisition is more likely if the firm previously owned the company, by the partner with large equity share and by the partner who increase its equity share. Closure is less likely for smaller IJVs, pre-existing JVs and knowledge intensive JVs |
| Park and Russo (1996) | Acquisition, dissolution | Endogenous (JVs between direct competitors, Integrative JVs, JVs between firms with experience in interfirm collaboration, JVs whose partners have concurrent multiple linkages, the number of parties in the JV) | TCE | Examine the effects of several determinants of joint venture dissolution | A post-hoc test shows that dissolutions of joint ventures are linked to a different set of causal variables than acquisitions. The number of IJV partners does not influence the likelihood of acquisition, but the likelihood of dissolution |
| Reuer (2002) | IJV buyout, selloffs (no inclusion of the possibility of continuing the IJVs) | Endogenous and exogenous (Parent firm's commitment to the venture, relationship to the venture, financial resources, equity control over the IJV, cultural distance, political risk in the host country) | Various theories, including the property rights approach and TCE | Examine the antecedents of U.S. firms' IJV buyout and selloff decisions | Increased likelihood of buyout if partner has financial resources, already has high levels of control, and the IJV operates in culture similar to the host country. Sell off more likely for exploratory, peripheral IJVs and if partners need to release and redeploy financial proceeds |
| Termination modes | Explanatory variables | Theoretical background | Focus of the study | Empirical findings | |
|---|---|---|---|---|---|
| Acquisition, dissolution | Endogenous (relatedness of IJV partners) | RBV, TCE | Examine the performance and duration of scale vs. link alliances | Technically oriented link alliances are more likely to be acquired than scale alliances | |
| Sell off vs. liquidation | Endogenous and exogenous (ownership, length of experience, relatedness, establishment mode, parent firm size, industry growth) | TCE | Compare the longevity of stakes in joint ventures vs. those in wholly owned subsidiaries while distinguishing between two types of exit (sell off vs. liquidation) | Japanese firms more likely to terminate their stakes in U.S. joint ventures than in wholly owned subsidiaries | |
| Sell off vs. liquidation | Endogenous and exogenous (Cultural distance, industry growth, change in the exchange rate) | TCE | Compare the longevity of Japanese-American JVs vs. Japanese-Japanese JVs | Longevity of Japanese-American JVs is shorter than that of Japanese-Japanese JVs for dissolutions that result from the sale of the venture to one of the partners, not for those due to liquidation or sale to a third party | |
| Acquisition (incl. acquisition by third parties, dissolution) | Endogenous and exogenous (dominant control, size differences, industry concentration, partner's market access) | TCE, strategic behavior, organizational ecology | Examine the termination rates of domestic vs. international joint ventures | Instability peaks in year 5 and 6. The rates of termination through acquisition are more stable than the rates of termination through dissolution | |
| Acquisition (acquisition and dissolution are contrasted in a post-hoc test) | Exogenous (unexpected increase in the value of the IJV and the degree of concentration in an industry) | Options logic | Examine what factors increase the likelihood of acquisitions while differentiating acquisitions from dissolutions | Unexpected increases in the value of the venture and the degree of concentration in the industry affect the likelihood of acquisition | |
| Closure, acquisition | Endogenous (whether Joint ventures were created from an already existing firm, initial equity share, change in equity share, use of knowledge assets, JV size) | No explicit reference to a specific theory | Examine the effects of several factors on IJV closure and acquisitions | Acquisition is more likely if the firm previously owned the company, by the partner with large equity share and by the partner who increase its equity share. Closure is less likely for smaller IJVs, pre-existing JVs and knowledge intensive JVs | |
| Acquisition, dissolution | Endogenous (JVs between direct competitors, Integrative JVs, JVs between firms with experience in interfirm collaboration, JVs whose partners have concurrent multiple linkages, the number of parties in the JV) | TCE | Examine the effects of several determinants of joint venture dissolution | A post-hoc test shows that dissolutions of joint ventures are linked to a different set of causal variables than acquisitions. The number of IJV partners does not influence the likelihood of acquisition, but the likelihood of dissolution | |
| IJV buyout, selloffs (no inclusion of the possibility of continuing the IJVs) | Endogenous and exogenous (Parent firm's commitment to the venture, relationship to the venture, financial resources, equity control over the IJV, cultural distance, political risk in the host country) | Various theories, including the property rights approach and TCE | Examine the antecedents of U.S. firms' IJV buyout and selloff decisions | Increased likelihood of buyout if partner has financial resources, already has high levels of control, and the IJV operates in culture similar to the host country. Sell off more likely for exploratory, peripheral IJVs and if partners need to release and redeploy financial proceeds |
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