Relational Drivers of International Joint Venture Performance: The Role of Trust, Cultural Compatibility, and Knowledge Sharing.

Abstract

For multinational corporations looking to enter international markets while sharing resources, risks, and technological capabilities, international joint ventures (IJVs) are a popular tactic. Despite their strategic importance, a lot of IJVs fail due to interpersonal disputes, mistrust, and cultural differences between partner companies. This study looks at the way knowledge sharing, trust, and cultural compatibility affect international joint venture performance.This study applies structural equation modelling (SEM) to assess the relationships between important constructs using survey data gathered from 250 managers involved with IJVs across manufacturing and service sectors. The results show that cultural compatibility has a major impact on partner trust, which in turn improves organisational commitment and knowledge sharing. Improving IJV performance is regulated by commitment. The results contribute to the body of knowledge on international strategic alliances by integrating relational and cultural perspectives into a structural equation modelling framework. The study also offers managerial insights for multinational firms seeking to enhance partnership outcomes through effective knowledge exchange methods and trust-building tactics. Based on the findings, companies that collaborate internationally should place a high priority on cultural alignment, create open channels of communication, and create governance frameworks that promote mutual respect and dedication. These tactics have the potential to greatly enhance international joint ventures' long-term viability and performance.