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Does responsibility breed stability? An institutional framework on the link between partner corporate social responsibility and joint venture termination

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  • Dai, Qing
  • Wang, Lucas Liang

Abstract

Joint ventures (JVs) are one of the most common governance structures for interfirm cooperation but also highly unstable. Building on institutional theory, this study argues that corporate social responsibility (CSR) of a partner can mitigate the risk of JV termination by enhancing the venture’s legitimacy. This legitimization effect of partner CSR is expectedly stronger for JVs that lack direct justifications for legitimacy or engage with similar stakeholder groups. However, the effect of partner CSR on JV legitimacy and stability diminishes if the partner is state-owned or holds less ownership in the JV. Empirical evidence from 256 JVs supports all the hypothesized relationships in our institutional framework. This study forges a critical link between responsibility and stability in the partner-JV dyad, thereby expanding the understanding of JV termination and CSR.

Suggested Citation

  • Dai, Qing & Wang, Lucas Liang, 2024. "Does responsibility breed stability? An institutional framework on the link between partner corporate social responsibility and joint venture termination," Journal of Business Research, Elsevier, vol. 183(C).
    • Handle: RePEc:eee:jbrese:v:183:y:2024:i:c:s0148296324003187
    DOI: 10.1016/j.jbusres.2024.114814
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