International Joint Venture (IJV) in emerging economies: Case Study of Automotive Industry

Abstract

International Joint Venture (IJV), a popular form of Foreign Direct Investment (FDI), is a favourite mode for automobiles multinational companies (MNCs) to expand into new markets, especially emerging economies. However, many things are considered by MNCs in selecting investment destinations, including industry growth and the quality of destination countries. Therefore, emerging economies need to show their attractiveness to attract MNCs to invest there. This research has analysed the growth of the automotive industry in two emerging economies, India and Indonesia, and its economic impacts, and provides information on the contribution of the IJV to the host country and explains the attractiveness of the two countries, particularly in the automotive field. The findings on the research are useful in giving consideration to MNCs to invest in both countries, especially in the automotive field. Furthermore, it also provides information to emerging economies about the contribution of the IJV company to the host country.