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How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?

Author

Listed:
  • Xuan Bai

    (Southwestern University of Finance and Economics)

  • Jeanine Chang

    (Deakin University)

  • Julie Juan Li

    (City University of Hong Kong)

Abstract

Legitimacy has been identified as an important factor influencing the survival of international joint ventures (IJVs). Yet empirical studies exploring IJV strategies for gaining post-formation legitimacy are scarce. This study examines how IJVs accumulate legitimacy after their formation in China. We identify two non-market strategies, namely corporate social responsibility (CSR) and political ties, and compare their effects on gaining two types of legitimacy: political legitimacy and market legitimacy. Data obtained from senior and middle IJV managers in China lends empirical support for the direct effects of CSR and political ties on IJV legitimacy-building. Surprisingly, we find that CSR has a stronger effect on gaining both political and market legitimacy than political ties. Furthermore, both political and market legitimacy contribute to IJVs’ performance.

Suggested Citation

  • Xuan Bai & Jeanine Chang & Julie Juan Li, 2019. "How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?," Management International Review, Springer, vol. 59(3), pages 387-412, June.
    • Handle: RePEc:spr:manint:v:59:y:2019:i:3:d:10.1007_s11575-019-00382-x
    DOI: 10.1007/s11575-019-00382-x
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