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Title: An analysis of the determinants of short-run value creation and long-run partner opportunism in UK joint ventures
Author: Wen, Jie
Awarding Body: University of Ulster
Current Institution: Ulster University
Date of Award: 2012
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Joint venture (JV) is a business which is established by two or more firms to undertake economic activities together. Although it has been discussed by scholars for decades, some literature gaps are still found in the current literature: the main theoretical rationales of JV have not been summarized; insufficient empirical evidence is provided to support those theories; especially, empirical evidence from the UK is very limited. In order to fill these gaps, this study firstly summarizes and creates a taxonomy for the JV foundation theories, ranging from economic theories and game theory to organizational theories. By adopting the short-run event study methodology and a cross-sectional analysis, the UK JV s announced from 1997 to 2005 are circumspectly investigated. Overall, this study finds that JV partners substantially benefit from the forming of a JV, particularly the partner with the smaller size, lower financial gearing, less investment opportunity and less technology embedding. JV initial investment is also found to affect the market reaction to the JV announcement, negatively. The second part of this study focuses on the long-run performance and partner opportunism of UK JVs. Following the research of Das and Rahman (2010), partner opportunism is regarded as a significant cause of JV failure. As a further supplement to Das and Rahman (2010), this study reviews previous partner opportunism literature and develops 6 possible determinants of JV partner opportunism: firm size, intangible asset, debt ratio, initial investment and cultural distance index. By employing the long horizon event study methodology, the long-run performance of UK JVs in the 3 years after their announcement is thoughtfully examined. The results indicate that only half of UK JVs can be considered to be a success. Among them, JV partners with the smaller size, less technology embedding and higher debt ratios are found less likely to commit opportunism and thus more likely to achieve long-run success. Moreover, the JV project size is also found to be positively associated with its long-run performance.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available