Indian international joint ventures: Study of differential wealth gains; ownership and stability

Abstract

In order to develop a holistic understanding of the International Joint Venture Indian companies get into, we decided to look at them from two different perspectives. First of all we explored the JVs at a partner behavioural level i.e. how the nature of the two companies affects the gains of partners in the JV. We explore how the gains from the joint venture are shared- are they equally distributed or does one company enjoy differentially higher gains. Backed by our literature study, we posit that the gain sharing is not equal and one company does enjoy higher gain and we call the difference as private gains. We then explored what are the factors which affect these dynamics of gain sharing. Based on our developed understanding and past researches, we formed certain hypothesis related to this topic and tested them. Based on the wide scale secondary data analysis, we were able to prove four of the five hypotheses formed. We report our findings in Section 3. After understanding how the dynamics between at an individual level affect gain sharing between them, we moved to a macro perspective for further insights on Indian JVs. At an aggregate level, we looked for trends/ patterns which emerge over the last 23 years of Indian JV history. We focused on the three important aspects of a JV i.e. time period of creation, control structure and industry. We felt that the interaction between these three should explain some critical aspects about JVs Indian companies form with foreign counterparts. Based on our findings, which we report in the Section 4, we are able to explain several issues such as relationship between stability, life span, controlling structure of the JV etc.