Impact of control and trust on international joint venture performance:

Abstract

Most scholars agree that both control and trust are important for IJV success. This study examines the impact of control and trust on IJV performance by using multiple case studies.

In the theoretical part of the study, firstly the concept of control is studied by underlying the importance of control in IJV and identifying three dimensions of control in IJV. Secondly, the concept of trust has been discussed by analyzing the three important dimensions of trust. Thirdly, IJV performance concept and its measurements have been discussed. Fourth, the relationship between control and performance, and the link between trust and performance were analyzed.

For the empirical study, both objective and subjective measurements were used, and all parent companies’ perspective was gathered through semi-structured telephone interview. The main conclusions are the following: First, both Chinese and British parent companies agree that control mechanisms, control focus and control extent has positive relation with IJV financial output, overall satisfaction and goal achievement. Furthermore, both Chinese and British parent companies agree that trust has positive relation with IJV performance. In addition, Chinese parent companies believe that there is positive relation between control and trust in IJV. Finally, findings reveal that control has direct effect on IJV performance and trust has indirect effect on IJV performance.