Frequency and directional reversal of equity ownership change in international joint ventures

Akie Iriyama, Weilei (Stone) Shi, John E. Prescott

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Changes in equity ownership between international joint venture (IJV) partners over an IJV life-course represent an important behavioral manifestation of relational dynamics. We examine each occurrence of equity ownership change for two salient temporal properties: frequency (how often ownership change occurs) and directional reversal (when a partner buys and then sells, or vice versa, equity shares from another partner). Building on social exchange theory, we propose that initial partner equity imbalance and partners' country's individualism-collectivist culture has an imprinting effect on the likelihood of ownership change for both temporal properties. We developed a data set consisting of all equity changes in 200 Japanese automotive suppliers' IJVs and found support for our hypotheses while controlling for transaction cost explanations. Our findings contribute to IJV research by shedding light on temporal aspects of equity ownership change over an IJV's life course as well as the underlying exchange dynamics and the stability of IJV equity ownership distribution among partners.

Original languageEnglish
Pages (from-to)215-243
Number of pages29
JournalAsia Pacific Journal of Management
Volume31
Issue number1
DOIs
Publication statusPublished - 2014 Jan 1

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Keywords

  • Directional reversal
  • Equity ownership change
  • Frequency
  • International joint venture
  • Social exchange theory
  • Temporal properties

ASJC Scopus subject areas

  • Business and International Management
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management

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