It is widely believed that firms choose joint venture forms overseas
when confronted with high socio-cultural distance. However, the probability
of choosing the joint venture form is expected to be moderated by the
firm-specific characteristics of the investing firm as well as
country-specific characteristics of the country of investment. This study
examines the moderating role of some firm- and country-specific factors on a
firm's choice of joint venture form in response to socio-cultural distance.
The firm-specific factors examined in this study include size,
multinationality, and technological intensity; and the country-specific
factors examined in this study include country risk and market potential.
Recent data from a sample of U.S. manufacturing firms is used to test the
contingency hypotheses. Results indicate the usefulness of the contingency
approach for modeling choice of joint ventures.
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