The Formation and Evolution of Non-Equity: Strategic Alliances in China

Abstract

Contractual joint ventures (CJVs) are a major form of non-equity strategic alliance in China, employed mainly by Hong Kong firms in the south China province of Guangdong. Due to its ambiguous legal status and the lack of conceptualisation of its contractual nature, there has been little empirical research on CJVs. By theorising CJVs as a relational subcontracting arrangement and based on the data from structured interviews with managers from both sides, this paper reveals the managerial decisions pertaining to the formation and evolution of the CJV non-equity alliances in Guangdong.

Keywords: non-equity alliance formation, non-equity alliance evolution, contractual joint ventures, China

JEL Classification: F23