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Equal ownership split in international joint ventures: performance implications in an emerging market

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Listed:
  • Hyo Eun Cho

    (Korea University)

  • Jon Jungbien Moon

    (Korea University)

  • Insik Jeong

    (Korea University)

Abstract

Are equal ownership splits advantageous for international joint ventures (JVs) in an emerging economy? Following a regression discontinuity approach, this study addresses the question by investigating subsidiary-level financial performance and considers an inherent endogeneity issue. Using panel data of international JVs in China, we compare the performance of equal ownership, minority, and majority JVs. We find that equal ownership JVs generate financial advantages over minority- or majority-foreign-owned JVs and other ownership types when a foreign partner possesses limited knowledge of the host country. Moreover, we find that the financial benefits of an equal ownership split are more salient for JVs located in regions with less developed institutions.

Suggested Citation

  • Hyo Eun Cho & Jon Jungbien Moon & Insik Jeong, 2022. "Equal ownership split in international joint ventures: performance implications in an emerging market," Asian Business & Management, Palgrave Macmillan, vol. 21(2), pages 205-230, April.
    • Handle: RePEc:pal:abaman:v:21:y:2022:i:2:d:10.1057_s41291-020-00126-y
    DOI: 10.1057/s41291-020-00126-y
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