INTERNATIONAL JOINT VENTURES By

The study presented here concentrates on a particular form of joint ventures, namely those with an international perspective. It starts with a definition of joint ventures and the different types these may take, continuing with detailing the types of problems that arise in negotiating joint venture agreements. Further on, a comparative analysis between wholly owned subsidiaries and joint ventures underlines the pros and cons in choosing either path while deciding to make an investment abroad. Both sides of a joint venture need to sustain comparative advantages in the relationship, the absence of which, on either side, will cause the joint venture to be less successful or, at the extreme, to fail. While cultural and personal factors can clearly be important to success as well, they are less critical than the maintenance of organizational complementarities between the two or more corporate partners. Joint ventures are perhaps more commonplace in dynamic sectors such as information technology, but they are also found in many traditional sectors, such as natural gas, mining and food distribution. In addition, joint ventures continue to be an important means of tapping local market expertise and thus facilitating foreign direct investment, especially where such investment would be legally blocked without the involvement of the local partners (e.g