Configurations of Governance Structure, Generic Strategy, and Firm Size: Opening the Black Box of Value Creation In International Joint Ventures

Abstract

To better identify the antecedents of joint venture ( JV ) performance, we investigate the singular and joint effects of: (1) JV governance structure (shared control; dominant control); and (2) JV competitive strategy (cost leadership; differentiation; hybrid) on stock market expectations of American parents' JV performance. We combine arguments from the JV governance, generic strategy, and organizational studies literatures to delineate the strategy‐structure‐size configurations required for creating superior abnormal returns. In doing so, we also unpack the moderating role of firm size vis‐à‐vis strategy‐performance and structure‐performance relationships. Our efforts contribute to a more sophisticated understanding of the mechanisms for creating shareholder value in American manufacturing firms who participate in international JVs. We generate five hypotheses and find full or partial support for them in our sample of almost 200 international JVs.