Resources and Performance of International Joint Ventures in China

Drawing on the resource-based view and organizational learning theory, this study examines the effect of resources and capabilities on IJV performance. Unlike extant research which largely assumes a bipartite relationship, the present study views an IJV as representing a tripartite relationship involving the IJV, its foreign parent and its local parent. Accordingly, it examines the effect of resources contributed by both ‘foreign’ and ‘local’ parents. It also examines the moderating role of IJV’s absorptive capacity on the relationship between resources acquired from the two parents and the performance of the IJV. Results from a survey of IJVs in China provide support for the argument regarding complementary resource contributions, absorptive capacity, and their impact on IJV performance. Performance of the IJVs seems to be driven by the complementary resources of partner firms in combination with absorptive capacity of IJV.