Acquiring knowledge by foreign partners from international joint ventures in a transition economy: learning‐by‐doing and learning myopia

Abstract

This paper proposes and tests a model of how firms acquire knowledge from their international joint venturing experience. Based on survey responses from 73 Singapore and 89 Hong Kong firms with respect to their joint ventures set up in China, the results indicate that both overseeing effort and management involvement are significant channels of knowledge acquisition. The former channel is more important for firms with a great deal of operational experience in China and for parents of older joint ventures. This finding indicates that firms improve their skills of knowledge acquisition through learning-by-doing. Moreover, the strategic importance of the venture concerned, instead of the learning intent of the parent, is the driving force behind the allocation of resources to the two channels. This implies that firms mainly learn through managing their key joint ventures. Since a venture that provides novel and fruitful learning experience may not, and need not, be an operation of great strategic importance, this finding suggests the existence of learning myopia.

When do domestic alliances help ventures abroad? Direct and moderating effects from a learning perspective

“…Vicarious learning, one of the most studied processes in the literature on alliances (Tsang, 2002), is motivated by alliance partners' goals to absorb the deeply embedded knowledge from each other (Hamel, 1991). In the context of our study, because a minimum condition for the transfer of knowledge between partners often requires some level of empathy and familiarity (Baum and Ingram, 2002), ventures should be able to better identify (and empathize) with domestic partners who internationalized from the same country (Wiklund and Shepherd, 2009), in turn enhancing the conditions for transfer of internationalization knowledge.…”

Strategies for Superior Performance in Recessions: Pro or Counter-Cyclical?

“…Indicators have good reliability (Tsang, 2002), particularly considering early stages of theory development (Hair et al, 2011;Hulland, 1999); this is true except for the pricing indicator, kept for conceptual relevance (Schotter & Beamish, 2013) and consistency with Navarro et al (2010). Constructs have adequate reliability (composite reliabilities higher than 0.70) and discriminant validity, as the average variances extracted are higher than squared correlations between constructs (Crossland & Hambrick, 2011;Fornell & Larcker, 1981).…”

The Role of Strategic Technology Alliances (STA) Towards Organizational Performance in Manufacturing Industry: The Perspective of Developing Countries

“…For example, studies by Hastings (1999) and Peek, Rosengren and Kasirye (1999) found that international joint ventures do not always lead to increased firm performance. However, this type of collaboration can create new knowledge and competencies that will eventually lead to innovation and competitive advantage (Bakerma et al, 1997;Tsang, 2002). In terms of developing new products in the pharmaceutical industry, equity alliances are a popular choice for early phase of product development (Bierly III, 2004).…”