Title: The structure of decision rights in international joint ventures: a property rights and transaction cost view
Authors: Josef Windsperger; Oksana Galak; Aveed Raha
Addresses: Faculty of Business, Economics & Statistics, University of Vienna, Vienna, Austria ' Faculty of Business, Economics & Statistics, University of Vienna, Vienna, Austria ' Faculty of Business, Economics & Statistics, University of Vienna, Vienna, Austria
Abstract: This paper explores the structure of decision rights in International Joint Ventures (IJV) by developing a new theoretical framework combining the property rights and transaction cost explanations. Based on the property rights theory, we distinguish between the more intangible strategic knowledge assets and the less intangible operational knowledge assets, and show that the former have a stronger impact on the assignment of decision rights to the JV partners than the latter. Under the transaction cost perspective, we hypothesise that institutional, cultural and market uncertainties are negatively related to the share of decision rights assigned to the parent company JV partner. Empirical data from the JVs of Austrian companies in CEE provide general support for the hypotheses. This study contributes to the IJV literature by applying property rights theory to explain the impact of operational and strategic knowledge assets on the structure of decision rights in IJVs.
Keywords: joint ventures; property rights theory; intangible knowledge assets; uncertainty; decision rights.
European Journal of International Management, 2023 Vol.19 No.3, pp.338 - 364
Accepted: 29 Sep 2021
Published online: 07 Feb 2023 *