Relational factors in UK-Chinese international joint ventures

Purpose – This paper sets out to address the influence of relational variables, such as trust and commitment, on international joint venture (IJV) performance, in the empirical context of UK/Chinese joint ventures.
Design/methodology/approach – The paper starts with a discussion of the importance of inter-firm relationships in China and how there currently exists relatively little research in this area. Qualitative research was chosen to create a holistic picture of the possible impact of relational factors on IJV performance.
Findings – Trust appears to be the most important of the relational factors on IJV performance, followed by commitment, cooperation and satisfaction. Chinese cultural values, such as guanxi, also need to be taken into account as an important factor of IJV relationships.
Research limitations/implications – When researching inter-firm relationships, ideally data would be gathered from both parties. This was not possible owing to difficulties encountered in gaining access to the Chinese parent organisations. Nevertheless, the findings are of interest to British firms interested in the Chinese market.
Practical implications – Joint ventures in China continue to experience high failure rates. Failure to nurture relationships with joint venture partners is one reason for failure. Despite the limitations noted above, the findings make a useful contribution to the management literature on China.
Originality/value – Whereas many researchers have studied financial and non-financial measures of joint venture performance, little has been written on relational factors and performance.