Inter-partner differences in globalization exposure and national culture and IJV termination: A comparison of emerging versus developed market host countries

Abstract

This study investigates how differences in globalization exposure and national culture between international joint venture (IJV) partner firms influence the likelihood of IJV termination. Building on prior research that has largely treated inter-partner differences as composite constructs, we instead examine the specific dimensions of globalization exposure and cultural orientations, thereby offering a more granular understanding. Drawing from a comprehensive panel dataset of 24,957 IJVs formed across 55 countries between 1991 and 2016, we also consider the IJV host country’s economic development as a contingency factor. Our findings indicate that certain inter-partner differences can be functional, reducing the rate of IJV termination, while others are dysfunctional and increase termination likelihood. Moreover, differences in specific dimensions become more or less functional depending on whether the IJV is hosted in an emerging versus a developed market context. Overall, our findings deepen the IJV literature and provide meaningful insights on strategic alliance formation.