RandD intensity and international joint venture performance in an emerging market : moderating effects of market focus and ownership structure

In this study we examine the contingent relationship between RandD intensity and performance of international joint ventures (IJVs) in an emerging market context. Based on Teece's (1986) arguments regarding the appropriability of innovation, we identify two types of appropriability hazard related to IJVs RandD activities in this context: local-market-related and local-partner-related hazards. We argue that a positive relationship between RandD intensity and IJV performance is more likely to occur if these appropriability hazard can be mitigated. Results using a sample of manufacturing IJVs in China provide support for these arguments. We find that RandD intensity is positively related to performance in export market-focused IJVs but not in local market-focused IJVs. In addition, using a configuration approach, we find that RandD intensity is positively related to performance in IJVs that have an export market focus and in which the multinational companies (MNCs) have a majority ownership, but not in other market focus-ownership structure configurations. These findings contribute to our knowledge of RandD activities of MNCs overseas subsidiaries.