The Termination of Related and Unrelated Joint Ventures: A Contingency Approach

28 Pages Posted: 23 Dec 2011

See all articles by Anna Shaojie Cui

Anna Shaojie Cui

University of Illinois at Chicago - College of Business Administration

Shyam Kumar

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Date Written: December 21, 2011

Abstract

Previous research has investigated various factors that influence joint venture (JV) termination. Yet the majority of studies do not distinguish between different types of JVs, particularly whether a JV is related or unrelated to the parent firm. Due to their inherent differences, related and unrelated JVs are likely to evolve distinctly, and their tendency to terminate may also differ under various conditions. This study takes a contingency approach and argues the impact of various factors on JV termination depends upon relatedness. An event history analysis finds increases in environmental uncertainty and higher resource complementarity reduce the likelihood that a firm will terminate unrelated JVs as compared to related JVs. Conversely parent firm performance and wider JV scope increase the likelihood that the firm will terminate unrelated JVs as compared to related JVs. The findings suggest the need to consider JV relatedness in understanding of JV evolution and termination.

Keywords: Joint ventures, Termination, Relatedness

Suggested Citation

Cui, Anna Shaojie and Kumar, Shyam, The Termination of Related and Unrelated Joint Ventures: A Contingency Approach (December 21, 2011). Journal of Business Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1975539

Anna Shaojie Cui (Contact Author)

University of Illinois at Chicago - College of Business Administration ( email )

601 South Morgan Street
11th Floor
Chicago, IL 60607
United States

Shyam Kumar

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

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