Strategic motivations and performance determinants of the UK International Joint Ventures (IJVs) in China and India: A dual parent perspective

International Joint Ventures (IJVs), a post-war phenomenon associated with the international expansion of US Multinational Enterprises (MNEs), is considered to be a well-studied subject within the International Business (IB) discipline. Nevertheless, the review of the literature has indicated a series of conceptual, theoretical and methodological challenges surrounding the study of IJVs. One of the key conceptual challenges is the ambiguity that exists with regard to the adoption of a clear definition, which has direct theoretical and methodological implications. Concurrently, the rise of emerging countries like China and India and their MNEs further stresses the need for clearer definitions, renewed theoretical frameworks and empirical insights that offer multi-level analysis, departing from only focusing on the developed country MNE partner.
This PhD thesis seeks to shed light on the expansion of equity IJVs between developed-country MNEs and firms from emerging countries by answering two research questions:
(1) “To what extent different location characteristics determine the strategic motivations of IJVs formed by UK MNEs in India and China, and if these location characteristics are assessed differently between UK MNE parents and Indian and Chinese parents and (2) “To what extent dynamic capabilities determine the short-term and long-term performance of UK IJVs in India and China, and if (and how) these may vary between UK MNE parents and Indian and Chinese parents.
In alignment with the adopted equity-based definition of IJVs, the thesis implemented an interdisciplinary theoretical framework by drawing on Dunning’s Ownership-Location-Internalisation (OLI) framework and the typology of strategic motivations comprising of market seeking (MS), efficiency seeking (ES) and knowledge seeking (KS). Furthermore, the subjective short-term performance (STP) and the long-term performance (LTP) measurements were applied against Resource-Based View (RBV) of dynamic capabilities (DCs), discerning between strategic dynamic capabilities (SDCs) and operational capabilities (OCs)
To collect data, questionnaire surveys were sent to the UK MNEs and the partner parent firms in China and India, as well as to their IJVs. A sample of 40 UK parents’ and 35 Chinese and Indian parents’ responses have been analysed using factor analysis, OLS and ordered logit.
In sum, the results on the first Research Question confirm the different perspectives of the IJV partners. Thus, UK partners and emerging market partners qualify location factors in a different way and, furthermore, location factors seem to have a varying impact on different types of strategic motivations per partner. This outcome justifies the importance to have both partners’ perspectives when investigating strategic motives as a key component of the explaining IJV formation and management. The results of the second Research Question confirm the diverse perception of UK and emerging country partners (China and India) on the type of dynamic capabilities that may affect their STP and LTP respectively. Thus, the empirical findings for both research questions in this study found support for some of the hypotheses developed but at the same time revealed new relationships among variables where context does drive this fuzziness in results. Consequently, this thesis consolidates and deepens our knowledge on IJVs as it applies and empirically tests multi-theoretical frameworks that provide the necessary background in explaining fuzzy outcomes on the global expansion of IJVs.