Comparative evolution of Japanese–European joint ventures in Japan and Europe

Abstract

Purpose – We investigate whether the partnership behavior of Japanese partners in their joint ventures (JVs) with European partners in Europe can be explained by the Trojan horse hypothesis (THH) view or by the cooperative specialization (CS) view. The THH view assumes that Japanese firms establish JVs to steal the knowledge of their partners and dissolve JVs as soon as they have achieved their goals. The CS view, on the other hand, argues that Japanese firms set up JVs to achieve CS and that these JVs will be stable.

Methodology – First, we derive implications of both the THH and the CS views for the longevity of JVs. Second, we make a census of all Japanese–European JVs manufacturing in 1987 and analyze their evolution to 1996. Third, we count how many of these JVs have evolved in ways that are predicted by the THH and the CS views. We argue that a particular view is supported if the number of JVs following the predicted path is larger than that following alternative paths.

Findings – We find that the partnership behavior of Japanese firms is more consistent with a CS view than with a THH view.

Limitations – This is a conservative test of THH behavior since JVs can dissolve for other reasons than the knowledge-stealing behavior of their Japanese partners.

Value of chapter – This is, as far as we know, the only study that has investigated the evolution of the population of Japanese–European JVs in Europe and has derived implications for the validity of the THH and CS views of JVs.

Citation

Ishii, S. and Hennart, J.-F. (2010), "Comparative evolution of Japanese–European joint ventures in Japan and Europe", Pla-Barber, J. and Alegre, J. (Ed.) Reshaping the Boundaries of the Firm in an Era of Global Interdependence (Progress in International Business Research, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 57-73. https://doi.org/10.1108/S1745-8862(2010)0000005007