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Establishing financial targets for joint ventures in emerging countries: A conceptual model

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  • Kashlak, Roger

Abstract

A conceptual framework is proposed regarding front-end financial targets for multinational entities (MNEs) regarding their international joint ventures with government-owned or government-influenced entities of economically emerging nations. The model theoretically integrates and advances two distinct levels of propositions. The first level suggests that prior to its establishment, a negotiating range will be influenced by an intersection of the MNE's strategic objectives and the host government's expectations of the cooperative effort. Subsequently, the MNE will adjust its expected compensation target within the established range due to the risk arising from various host country environmental factors. The proposed external environmental factors include cultural distance, political risk, economic instability, and host country operating level restrictions.

Suggested Citation

  • Kashlak, Roger, 1998. "Establishing financial targets for joint ventures in emerging countries: A conceptual model," Journal of International Management, Elsevier, vol. 4(3), pages 241-258, November.
    • Handle: RePEc:eee:intman:v:4:y:1998:i:3:p:241-258
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