Trust Between International Joint Venture Partners: Effects of Home Countries

Trust is an important factor in interorganizational relations. Interorganizational trust in cross-border relationships is likely to be influenced by the home countries of both partners. Using data on 165 international joint ventures (IJVs), we show that the perceived trustworthiness of an IJV partner is influenced by the general propensity to trust in the trustor's home country. Moreover, the trustworthiness perceived by a focal parent firm is also affected by the home country of the other IJV partner. This second effect is mitigated by experience between the partners

Revisiting the trustworthiness-performance-governance nexus in international joint ventures

This paper contributes to the research on international joint ventures (IJV) in the following ways: (1) by identifying different patterns of governance that partners in the post-formation period exercise and examining how contrasting patterns relate to variations in perceived partner’s trustworthiness, as well as to IJV performance; (2) by empirically testing the extent to which partners emphasize or even renegotiate and change different elements of governance; and (3) by complementing existing studies that have examined only unidirectional links among trustworthiness, performance and governance by considering possible simultaneous relationships that may exist among these variables. The findings from a survey and follow-up interviews with international joint ventures located in Taiwan reveal that levels of partners’ trustworthiness and performance satisfaction each, by itself, may lead to the deployment of different governance measures. However, it is the combinations of extreme (high or low) variants on both partners’ trustworthiness and performance satisfaction that seem to generate clearer patterns of governance. Low satisfaction and partners’ trustworthiness seem to encourage intensification of control or the deployment of more aggressive governance measures. In contrast, high performance satisfaction and partners’ trustworthiness may foster a combination of soft and routine forms of control