Local Partnering in Foreign Ventures

Loading...
Thumbnail Image
Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
This publication is imported from Aalto University research portal.
View publication in the Research portal
View/Open full text file from the Research portal
Date
2016-08-01
Major/Subject
Mcode
Degree programme
Language
en
Pages
23
1407-1429
Series
Academy of Management Journal, Volume 59, issue 4
Abstract
If partnering with local firms is an intuitive strategy with which to mitigate uncertainty in foreign ventures, then why don’t organizations always partner with local firms, especially in uncertain settings? We address this question by unbundling the effects of uncertainty in foreign ventures at the venture and country levels. We contend that, while both levels increase the need for partnering with local firms in foreign ventures, country-level uncertainty increases the difficulty of partnering with local firms and decreases the likelihood of such partnerships. We also posit that experiential learning helps firms manage the two types of uncertainty, and thereby reduces the need for partnering—yet, experience in the host country makes partnering more feasible and increases the likelihood of such partnerships. To test our hypotheses, we conceptualize the decision to partner with a local firm in a foreign venture as a multilayered decision, and model it accordingly. Using a global sample of venture capital investments made between 1984 and 2011, we find support for the distinct effects of venture- and country-level uncertainty as well as for corresponding levels of experiential learning. These findings have implications for the literature on cross-border venture capital investment and international business in general.
Description
Keywords
Other note
Citation
Liu , Y & Maula , M 2016 , ' Local Partnering in Foreign Ventures : Uncertainty, Experiential Learning, and Syndication in Cross-Border Venture Capital Investments ' , Academy of Management Journal , vol. 59 , no. 4 , pp. 1407-1429 . https://doi.org/10.5465/amj.2013.0835