An institutional and organisational learning perspective on the content of strategic formation choices of international joint ventures in China

Abstract

This paper examines how the content of strategic formation choices of International Joint Ventures (IJVs) converges or diverges over time. Strategic formation choices include partner selection (e.g., the number of partners, the status of local partners, the product relatedness between IJVs and its partners and the product relatedness among partners) and ownership structure (e.g., the ownership ratio between foreign and local partners). Hypotheses are tested in a sample of 4787 IJVs established in China from 1985 to 2001. The results show that the degree of conformity of strategic formation choices increases over time. The past experiences of joint ventures in China had a significant curvilinear relationship with the degree of conformity. This paper discusses the implications for theory and research on IJV formation and the institutional process.