Structuring International Joint Ventures: How Should Contractual Design Be Aligned with Environmental Conditions?

Abstract

Using international equity joint ventures (IJVs) as the analytical setting, this study examines the configurations between a set of contractual completeness attributes and a set of environmental conditions:

1) Our analysis suggests that contingency coverage of an IJV contract increases as environmental dynamism, complexity, and hostility increase. Issue inclusiveness of an IJV contract increases along with environmental dynamism. Clause specificity of an IJV contract decreases when environmental dynamism and complexity heighten.

2) The above configurations between contractual design and environmental conditions are found to have a favorable influence on IJV performance in a host country.