Initial Capacities and International Joint-Venture Performances: Case of Emerging Markets

The purpose of this study is to investigate the relationship between the existence of initial capacities within the host partners and the International joint-venture (IJV) performance. Three hypotheses were proposed. We suppose that the IJV firms have specific initial capacities compared to a subsample of non IJV firms that improve their ability to be engaged in such contractual relationships. Then we suppose that the initial capacities affect the extent of the IJV effects, in terms of the absorptive capacity dynamics. The third hypothesis assumes that structural profile affect the type of initial capacities that the host firms already possesses. The results provide compelling evidence on the relationship between the initial expertise's and the IJV performance.