Joint ventures in China: A comparative study of Japanese, Korean, and US partners

The authors develop a model to examine systematically the relationship amon g motivation, control, and performance of joint ventures in China. Motivati ons are categorized into three dimensions: efficiency, competition, and lea rning. Motivations determine the level of control in joint ventures, and th at level affects the joint venture's performance. The authors collected dat a from Japanese, Korean, and U.S. partners of joint ventures in China. They use structural equation modeling to test the model and examine cross-natio nal differences using a multigroup comparison method. The results suggest a complex relationship among motivation, control, and performance. More cont rol over joint ventures in China is beneficial to foreign partners, but the ability to exert control is influenced by firms' strategic intentions and familiarity with the local culture and market. Foreign partners that have s uch familiarity can exert considerable control over joint ventures and stil l obtain local knowledge. Foreign partners that want to enhance competitive ness can apply their advanced skills and technology in research and develop ment, production, and management to exert more control over these functiona l areas.