UK International Joint Ventures with the Triad: Evidence for the 1990s
| DOI | http://doi.org/10.1111/1467-8551.00082 |
| Published date | 01 September 1998 |
| Date | 01 September 1998 |
Introduction
It is generally accepted that since the late 1970s
that there has been an increase in inter-firm co-
operation with several studies reporting an ac-
celerating trend in international joint venture
(IJV) formation (for example, Hergert and Morris,
1988; Glaister and Buckley, 1994). An exception
to this was the slightly declining trend in coalitions
(which included joint ventures, licences, supply
agreements and ‘other long-term inter-firm ac-
cords’) found by Ghemawat, Porter and Rawlinson
(1986). Nevertheless, Anderson (1990) maintains
that more alliances and cooperative arrange-
ments have been announced since 1981 than in all
previous years, with firms from developed market
economies increasingly willing to engage in co-
operative ventures, often with their direct compet-
itors, as a strategic response to changing market
conditions (Harrigan, 1988). There is also a com-
monly held view that the wave of alliance activity
between firms from advanced market economies
will persist (Gomes-Casseres, 1996).
Parkhe (1991, pp. 579–580) has noted that com-
petitive advantage increasingly depends on a com-
pany’s alliances and the scope of its relationships
with other companies. A key aspect of alliances is
that they allow firms to acquire expertise from out-
side, rather than having to develop the capabil-
ities in-house (Blodgett, 1991; Hamel, 1991). The
strategic motivation for IJV formation which
underpins the growth of this organizational form
has been examined by a number of authors (for
example, Contractor and Lorange, 1988; Glaister
and Buckley, 1996; Harrigan, 1985; Mariti and
Smiley, 1983; Porter and Fuller, 1986). The com-
monly identified strategic motives are: risk
sharing; product rationalization and economies
of scale; transfer of complementary technology/
exchange of patents; shaping competition; to
facilitate international expansion; conform to
host government policy (i.e. where government
policy obliges a foreign firm to form a IJV with a
local partner); and vertical linkages where each
partner contributes one or more different elements
in the production and distribution chain.
The definition of inter-firm cooperative activity
is problematic (OECD, 1986), but it is possible to
identify two basic organizational modes of alli-
ance: equity joint ventures (EJVs) and non-equity
joint ventures (NEJVs) (Contractor and Lorange,
1988). EJVs are created when two or more part-
ners join forces to create a newly incorporated
company in which each has an equity share and
British Journal of Management, Vol. 9, 169–180 (1998)
UK International Joint Ventures with
the Triad: Evidence for the 1990s
Keith W. Glaister, Rumy Husan and Peter J. Buckley*
Leeds University Business School and *Centre for International Business University of Leeds,
Leeds University Business School, the University of Leeds, 11–15 Blenheim Terrace, Leeds LS2 9JT, UK
This paper identifies and analyses some basic trends and patterns in international
joint venture activity between UK firms and partner firms located in the Triad (North
America, Western Europe and Japan) over the 1990–96 period. Several dimensions of
UK international joint venture activity are examined: trends over time, geographic
distribution of foreign partners, industry characteristics, the purpose of the venture, the
number of partners and the UK partners’ equity shareholding. The study serves to
update and extend previous analyses of UK international joint venture activity with
partners from developed market economies.
© 1998 British Academy of Management
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