The termination of international joint ventures: Closure and acquisition by domestic and foreign partners

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10 Citations (Scopus)

Abstract

We study different modes of terminating international joint ventures, namely closure and acquisition, and find that different forces govern the two termination modes. Decisions regarding asset specificity and the size of the venture affect the likelihood of closure, but not that of acquisition. In contrast, full acquisition by one of the partners is related to history of the venture before the joint venture was formed, to decisions made at the time of the creation with respect to equity split between partners, and to subsequent changes of these initial decisions. Joint ventures that were created de novo are more likely to be closed down than those that were previously fully owned by one of the parties. The proportion of equity initially held by each partner and subsequent increases in this proportion increase the likelihood of the venture being fully acquired by that partner.

Original languageEnglish
Pages (from-to)677-689
Number of pages13
JournalInternational Business Review
Volume24
Issue number4
DOIs
Publication statusPublished - 1 Aug 2015

Keywords

  • Acquisition
  • Closure
  • Dissolution
  • Joint ventures
  • Survival
  • Termination

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