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How do international joint ventures build legitimacy effectively in emerging economies? CSR, political ties, or both?

journal contribution
posted on 2019-06-01, 00:00 authored by X Bai, In Ngan Chang, J J Li
Legitimacy has been identified as an important factor influencing the survival of international joint ventures (IJVs). Yet empirical studies exploring IJV strategies for gaining post-formation legitimacy are scarce. This study examines how IJVs accumulate legitimacy after their formation in China. We identify two non-market strategies, namely corporate social responsibility (CSR) and political ties, and compare their effects on gaining two types of legitimacy: political legitimacy and market legitimacy. Data obtained from senior and middle IJV managers in China lends empirical support for the direct effects of CSR and political ties on IJV legitimacy-building. Surprisingly, we find that CSR has a stronger effect on gaining both political and market legitimacy than political ties. Furthermore, both political and market legitimacy contribute to IJVs’ performance.

History

Journal

Management international review

Volume

59

Issue

3

Pagination

387 - 412

Publisher

Springer

Location

Berlin, Germany

ISSN

0938-8249

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2019, Springer-Verlag GmbH Germany, part of Springer Nature