International Joint Ventures, Partner Selection Criteria, Weak Host Country Governance, and a theoretical framework forecasting the success chances of the ventures

Abstract

The aim of this research is to critically examine how the weak host country governance affects the partner selection criteria in International Joint Ventures (IJVs). The study also explores how partner selection criteria differ between local and Global companies, how these criteria are impacted by the cultural distance between the home and host country and by the economic climate in the host country. This study positions the discussion in the field of International Strategic Management and focus on strategic alignment and resource adaptations across national boundaries weak governance. The study makes a theoretical contribution to expanding and elaborating on the Transaction Cost Theory, Resource-Based View (RBV), Institutional Theory, and Strategic Fit Theory. The aim of the study is pursued by adopting a mixed-method research design, which combines qualitative and quantitative data and methods. The primary quantitative data were collected using structured questionnaires administered among 54 experts in Abu Dhabi, Milan and Basra. The responses were subject to reliability testing, descriptive statistics analysis, factor analysis and correlation analysis in SPSS. Qualitative data are gathered by conducting case studies of IJVs and their evaluation by six industry experts. The analysis of case study data is performed by pattern matching and cross-case synthesis. The findings indicate that weak governance and cultural distance contribute to failures of IJVs, but task-related and partner-related criteria for IJV partner selection alleviate these effects and can turn IJVs even in countries with weak governance successful.