UK International Joint Ventures: An Analysis of Patterns of Activity and Distribution

Over the past decade or so there has been an increased interest by academic observers in inter-firm collaboration, largely fuelled by the apparent growing incidence of such collaboration as a form of corporate strategy (see, for example, the contributions to Contractor and Lorange, 1988a). Joint ventures are not in fact a new phenomenon, but have long been used by firms to move into new businesses and tap new markets, particularly where firms were expanding overseas. For instance entry by large UK or US multinational firms into overseas markets often required them to take local firms as partners. This was especially so within developing nations and socialist countries where, in order to penetrate the market, companies had to form joint ventures with domestic firms to satisfy host Government regulations. From the late 1970s, however, there has been an increased incidence of joint venture activity within industrial free market economies. Firms in Europe, the USA and Japan have formed joint ventures on a voluntary basis as a deliberate strategy in preference to undertaking an activity on their own behalf or through a fully owned subsidiary. It is increasingly the case today that companies are willing to entertain the possibility of cooperation as part of their strategic planning (Harrigan, 1988, p. 142; Lyons, 1991).