Selecting State or Private Joint Venture Partners in Emerging Markets: Impact of Liability of Foreignness and Rule of Law

Abstract

The present study develops an international joint venture (IJV) partner selection framework to explain the choice between state-owned or privately owned local partners in the context of emerging economies. We suggest that once an IJV is selected as the mode of entry, a multinational enterprise's strategic motivations – that is, efficiency seeking, market seeking and knowledge seeking – will influence its choice of IJV partner type: state-owned enterprise or privately owned firm. We argue that liability of foreignness and rule of law moderate the multinational enterprise's selection of IJV partner type.

Citation

Ramachandran, I., Clark, K., McIver, D. and Miller, S.R. (2011), "Selecting State or Private Joint Venture Partners in Emerging Markets: Impact of Liability of Foreignness and Rule of Law", Geisler Asmussen, C., Pedersen, T., Devinney, T.M. and Tihanyi, L. (Ed.) Dynamics of Globalization: Location-Specific Advantages or Liabilities of Foreignness? (Advances in International Management, Vol. 24), Emerald Group Publishing Limited, Leeds, pp. 153-179. https://doi.org/10.1108/S1571-5027(2011)0000024014