Ownership, control and performance of US - China joint ventures: A longitudinal study

Ownership, control and performance are central elements of international strategic alliances. In this longitudinal case study, we have tracked three U.S.-China joint ventures over their history of formation, operation and termination. Based on our interview and archive data, we have analyzed the critical aspects of U.S.-China joint ventures and drawn important insights on the operation of international strategic alliances. Specifically, we found that 1) ownership does matter; when joint venture partners may elect to use non-ownership based means to control the ventures' operation, they do aggressively bargain for higher ownership stake in the ventures' equity positions; 2) control may come at different level and in different forms; when equity position may provide a legal base for strategic and operational controls, the composition of the board, the appointment of general manager and key personnel, and control on key operational decisions such as pricing and selection of technology may also exert critical influence on the ventures' operation; 3) performance may not directly linked to the ownership; performance may be evaluated from different perspectives of joint venture partners, and from the interest of joint venture itself.