How do international joint ventures create shareholder value?

This study attempts to identify conditions under which announcements of int ernational joint venture (JV) formation lead to increases in shareholder va lue of participating U.S. firms. It does so by combining the singular theor etical foci of previous work an the topic and specifying previously unconsi dered, bur conceptually important, influences on firms' expected JV perform ance. The study's findings indicate support for the hypothesized effect of variables in partners' task-related, competitive, and structural context(s) , but not those in these firms' partner-related and institutional context(s ). Specifically, partner-venture business relatedness, the pursuit of R & D -oriented activity, greater equity ownership, and large firm size, all are found to have a positive impact on firms' JV-based value creation. Although this study finds support for the performance impact of firm-level competit ion, the direction of this impact is contrary to that hypothesized No suppo rt is found for hypothesized effect of partner-partner business relatedness , previous JV experience, partners' relative firm size, (national) cultural relatedness, and JV host country political risk. Copyright (C) 2000 John W iley & Sons, Ltd.