Do Sino-Foreign Joint Ventures Create Shareholder Value for Chinese Partners?

Based on the transactional theory of international joint ventures, we examine the stock price reactions for B-shares of the Chinese partners during the Sino-foreign venture announcements. Significant and positive announcement effects are found in the Shanghai and Shenzhen stock markets. We also attempt to identify determinants of the shareholders value creation. Four variables, namely geographic origin, size of foreign partners, status of Chinese partners and China's country risk, are found to be significant in the regression models.