Abstract

International Joint Ventures (IJVs) enable local partners in emerging economies to benefit from the technology and know-how of foreign partners, in exchange for local knowledge and business connections. It however is generally acknowledged that there has been a decline in the number of new IJVs world-wide since 1995. This trend has been attributed to the relaxation of restrictions on foreign investment prompted by the WTO, and operational problems within the IJVs themselves. Current theories offer explanations for IJV activity based on specific characteristics, but dynamic changes in the market environment itself can also affect IJV numbers. This paper investigates these effects through media and industry reports of significant events taking place in the automotive industry in China since 1990.