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The effect of trust on international joint venture performance in China

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  • Ng, Paul Wai-Kit
  • Lau, Chung-Ming
  • Nyaw, Mee-Kau

Abstract

The role of trust between the parent companies of international joint ventures (IJVs) is re-examined, and it is suggested that trust between parents is not only a major predictor of the achievement of financial and non-financial goals by IJVs as reported in the literature, but also moderates the relationship between IJV performance and certain contextual factors. Based on the responses of senior executives of IJVs and their parent companies in China, it is confirmed that trust influences IJV performance. The moderating effects of trust on the relationships between IJV performance and local reliance and the experience of executives were confirmed for the senior executive sample, but the moderating effect of cultural distance was not consistent between the firm-level and country-level measures. There was no significant result regarding these moderating relationships for the parent sample, except local reliance.

Suggested Citation

  • Ng, Paul Wai-Kit & Lau, Chung-Ming & Nyaw, Mee-Kau, 2007. "The effect of trust on international joint venture performance in China," Journal of International Management, Elsevier, vol. 13(4), pages 430-448, December.
    • Handle: RePEc:eee:intman:v:13:y:2007:i:4:p:430-448
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    References listed on IDEAS

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    5. Yong-Sik Hwang & Kidong Kim, 2018. "The Effects of Inter-Partner Trust on Third-Country Relocation of International Joint Ventures in China," Sustainability, MDPI, vol. 10(7), pages 1-23, July.
    6. Tao Bai & Jialin Du & Angelo M. Solarino, 2018. "Performance of foreign subsidiaries “in” and “from” Asia: A review, synthesis and research agenda," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 607-638, September.
    7. Lai, Christine & Singh, Barjinder & Alshwer, Abdullah A. & Shaffer, Margaret A., 2014. "Building and Leveraging Interpersonal Trust Within and Across MNE Subsidiaries: A Social Exchange Perspective," Journal of International Management, Elsevier, vol. 20(3), pages 312-326.
    8. Omayma Yassine, 2023. "Understanding the Paradox in the Results of National Cultural Distance Impact on International Joint Venture Performance: A Narrative Review of Prior Literature," Modern Applied Science, Canadian Center of Science and Education, vol. 17(1), pages 1-1, May.
    9. Paul Brockman & Sadok El Ghoul & Omrane Guedhami & Ying Zheng, 0. "Does social trust affect international contracting? Evidence from foreign bond covenants," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-34.

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