Abstract
We provide a two period, learning-based model of joint venture formation and breakdown. We show that depending on parameter values different dynamic patterns emerge. If the rate of learning is low, then a joint venture forms in both the periods. If the rate of learning is large, then the outcome may either involve joint venture breakdown, or delayed joint venture formation.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Al-Saadon, Y., and S. P. Das. (1996). "Host Country Policy, Transfer Pricing and Ownership Distribution in International Joint Venture: A Theoretical Analysis," International Journal of Industrial Organization 14, 345–364.
D'Aspremont, and A. Jaquemin. (1988). "Cooperative and Non-cooperative R and D in Duopoly with Spill-overs," American Economic Review 78, 1133–1137.
Bardhan, P. K. (1982). "Imports, Domestic Protection, and Transnational Vertical Integration: A Theoretical Note," Journal of Political Economy 90, 1020–1034.
Beamish, P. W. (1985). "The Characteristics of Joint Ventures in Developed and Developing Countries," Columbia Journal of World Business, Fall, 13-19.
Beamish, P. W., and A. C. Inkpen. (1995). "Keeping International Joint Ventures Stable and Profitable," Long Range Planning 28, 26–36.
Bhandari, B. (1996-97). "Losing Control," Business World, 25th Dec. 1996-7th January, 1997, 34-39.
Business India. (1996). "Why P and G and Godrej Broke Up," July 15-28, 54-59.
Business India. (1992). "A New Byte," November 23-December 6, 66-68.
Chan, R., and M. Hoy. (1991). "East-West Joint Ventures and Buyback Contracts," Journal of International Economics 30, 330–343.
Chao, C., and E. Yu. (1996). "Are Wholly Foreign-owned Enterprises Better Than Joint ventures?," Journal of International Economics 40, 225–237.
Choi, J. P. (1993). "Cooperative R and D With Product Market Competition," International Journal of Industrial Organization 11, 553–571.
Combs, K. L. (1993). "The Role of Information Sharing in Cooperative Research and Development," International Journal of Industrial Organization 11, 553–571.
Dymsza, W. A. (1988). "Successes and Failures of Joint Ventures in Developing Countries: Lessons From Experience," in F. J. Contractor, and P. Lorange (eds.), Cooperative Strategies in International Business. Lexington Books.
Ghosh, I. (1996) "Jinxed Ventures," Business World, 24th July-6th August, 54-60.
Gomes-casseres, B. (1987). "Joint Venture Instability: Is it a Problem?," Columbia Journal of World Business, Summer, 97-102.
Hamel, G. (1991). "Competition for Competence and Inter partner Learning Within International Alliances," Strategic Management Journal 12, 83–103.
Hamel, G., Y. Doz, and C. Prahalad. (1989). "Collaborate With Your Competitors and Win," Harvard Business Review 1, 133–139.
Hergert, M., and D. Morris. "Trends in International Collaborative Business," in F. J. Contractor, and P. Lorange (eds.), Cooperative Strategies in International Business. Lexington Books.
Katz, M. L. (1986). "An Analysis of Cooperative Research and Development," Rand Journal of Economics 16, 527–543.
Killing, J. P. (1982). "How to Make a Global Joint Venture Work," Harvard Business Review, May, June, 120-127.
Kabiraj, T. (1997). "A Simple Theory of Joint Venture Breakdown," mimeo, Indian Statistical Institute, Calcutta.
Kabiraj, T., and M. Chaudhuri. (1996). "An Input Joint Venture: Some New Results," mimeo, Indian Statistical Institute, Calcutta.
Kumar, R., and K. O. A. Nti. (1998). "Differential Learning and Interaction in Alliance Dynamics: A Process and Outcome Discrepancy Model," Organization Science 9, 356–367.
Kogut, B. (1988). "A Study of the Life Cycle of Joint Ventures," in F. J. Contractor, and P. Lorange (eds.), Cooperative Strategies in International Business. Lexington Books.
Larrson, R., L. Bengtsson, K. Henriksson, and J. Sparks. (1998). "Learning Dilemma: Collective Knowledge Development in Strategic Alliance," Organization Science 9, 285–305.
Marjit, S. (1990). "Rationalising Public-private Joint Venture in an Open Economy," Journal of Development Economics 33, 377–383.
Marjit, S. (1991). "Incentives for Cooperative and Non-cooperative R and D in Duopoly," Economic letters 37, 187–191.
Miller, R. R., J. D. Glenn, F. Z. Jaspersen, and Y. Karmakolias. (1996). "International Joint Ventures in Developing Countries: Happy Marriages?," Discussion Paper No. 29, International Finance Corporation, World Bank, Washington, D.C.
Pekar, P., and R. Allio. (1994). "Making Alliances Work-Guideline for Success," Long Range Planning 27, 54–65.
Purkayastha, D. (1993). "Firm Specific Advantages, Multinational Joint Ventures and Host Country Tariff Policy," Southern Economic Journal 60, 89–95.
Roy Chowdhury, P. (1995). "Technological Asymmetry and Joint Product Development," International Journal of Industrial Organization 13, 23–39.
Roy Chowdhury, P. (1997). "Foreign Collaborative Ventures and Quality of Technology," Journal of Quantitative Economics (forthcoming).
Reich, R., and E. Mankin. (1986). "Joint Ventures With Japan Gave Away Our Future," Harvard Business Review 2, 78–86.
Salant, S. W., S. Switzer, and J. Reynolds. (1983). "Losses From Horizontal Mergers: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," Quarterly Journal of Economics 98, 185–213.
Svejnar, J., and S. Smith. (1984). "The Economics of Joint Ventures in Developing Countries," Quarterly Journal of Economics 119, 149–167.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Roy Chowdhury, P., Roy Chowdhury, I. A Learning-Based Theory of Joint Venture Life-Cycles. Group Decision and Negotiation 9, 457–470 (2000). https://doi.org/10.1023/A:1008726920290
Issue Date:
DOI: https://doi.org/10.1023/A:1008726920290