Balancing IJV knowledge contributions and trust needs

Abstract

Purpose – This paper aims to present a model that explains how knowledge contributions of international joint venture (“IJV”) partners can be balanced or imbalanced, which affects each partners’ trust needs, with implications for future partner relationships. Design/methodology/approach – Illustrative examples aid in explaining propositions associated with the knowledge/trust needs balance model. In addition, consideration is given to the trust-building complication of liability of foreignness and the implications balance or imbalance. Findings – In total, 12 illustrative cases are evaluated to determine whether the knowledge contributions of the IJV partners are balanced. Knowledge intensity associated with the venture is assessed to determine the value of the foreign firm partner’s knowledge contribution. Cultural distance between the relevant countries provides a measure of the host country partner’s knowledge contribution. Balance is assessed after factoring in mitigating partner experience. The cases...