Abstract
A joint venture is “a contractual arrangement that creates a separate legal entity in which the parent firms hold ownership interests under conditions and provisions that are specified by a legal document” (Murray and Siehl 1989). According to Harrigan (1985), joint venture is formed by “separate entities with two or more active businesses as partners.” Gomes-Caseres (1987) understands a joint venture as “a subsidiary in which the multinational enterprise owns 5 percent to 95 percent of equity.” The equity can act as a governance mechanism (Brouthers and Hennart 2007). A joint venture is “an agreement by two or more parties to form a single entity to undertake a certain project. Each of the businesses has an equity stake in the individual business and share revenues, expenses and profits” (Išoraité 2009). A joint venture is also “a fast and effective way to acquire the missing knowledge that partners require to innovate” (Anderson et al. 2011). A joint venture is not expected to have indefinite existence. Its instability might be measured by unexpected termination via dissolution, sell-off, or acquisition (Park and Ungson 1997). Contractor and Lorange (2002) point out that a joint venture is a separate entity providing risks and rewards for the partners.
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Ferencikova, S., Hluskova, T. (2017). Role, Motivation, and Performance of International Joint Ventures in Slovakia. In: Marinova, S., Larimo, J., Nummela, N. (eds) Value Creation in International Business. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-30803-6_4
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