Andreas Klossek

Market Entry and Expansion Through International Joint Ventures Andreas Klossek

International joint ventures (IJVs) are important modes for entering foreign markets. Yet, research shows that IJVs are difficult to manage and often fail, especially when the IJV is located in a developing country. Many studies look at a range of different factors behind IJV success or failure, and a few longitudinal studies have shed light on some of the complex management processes within IJVs. Many researchers have concluded that the high rate of IJV failure is due to internal tensions that are inherent to IJVs, but viable solutions for practitioners are rare. In the absence of a model that adequately explains the longitudinal aspects and determinants of IJV performance, we see firms electing to stay in underperforming IJVs, even though more profitable modes of entry into foreign markets exist. This work analyzes market entry and expansion through IJVs by using a multi-causal analysis of IJV performance. It begins with a critical evaluation of the IJV literature. It then develops a process-oriented model that may explain why firms persist with failing IJVs. Finally, it draws several important conclusions that have valuable implications for practitioners and for future research.