Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/147664
Title: JOINT VENTURE PORTFOLIO CHARACTERISTICS AND FIRM PERFORMANCE IN VOLATILE ENVIRONMENTS: THE CASE OF SINGAPORE FIRMS DURING THE FINANCIAL CRISIS
Authors: OH YU JIN
Issue Date: 2012
Citation: OH YU JIN (2012). JOINT VENTURE PORTFOLIO CHARACTERISTICS AND FIRM PERFORMANCE IN VOLATILE ENVIRONMENTS: THE CASE OF SINGAPORE FIRMS DURING THE FINANCIAL CRISIS. ScholarBank@NUS Repository.
Abstract: Joint ventures (JVs) and other forms of inter-firm alliances have become commonplace in recent decades, as firm calibrate their corporate strategies in an increasingly competitive domestic and international market place. These developments have spawned a large body of research investigating JV formation motives and JV performance. Considerably less is known about how characteristics of the JV portfolio affect performance at the level of the parent firm. Even less ground has been covered with regards to how JV contributions to parent firms are affected by external shock. This study seeks to answer questions about how JV portfolio characteristics are related to firm performance, and how these relationships are augmented or moderated under volatile external environments. Empirical analysis of over a hundred parent firms and several hundred domestic and international JVs was conducted to test several hypotheses. Logistic regression showed that firms performed better the more JVs they engaged in, and performed increasingly poorly as the number of small partners and average cultural distance of the portfolio partners increased. Environmental shock proved to have no effect on the first relationship, but reversed the latter two. Partnering more small firms and partners that were culturally distant were actually beneficial to firm performance in volatile environments. For firms managing collaborative strategies, the results of this study complement existing literature on managing individual JVs, while at the same time highlighting the importance of analysing JVs from the perspective of the entire portfolio. Planning for external instability is essential as well, as this study has shown that volatile environments can turn well established JV–parent firm relationships on their heads.
URI: http://scholarbank.nus.edu.sg/handle/10635/147664
Appears in Collections:Bachelor's Theses

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