Predictors of IJV Performance and the Mediating Effect of Relationship Marketing Orientation Using Structural Equation Model

• Main Author: Wadeecharoen, Wanida
• Format: Thesis
• Language: English; English
• Published: 2011
• Subjects: HD28-70 Management. Industrial Management
• Online Access: http://etd.uum.edu.my/2574/1/Wanida_Wadeecharoen.pdf; http://etd.uum.edu.my/2574/2/1.Wanida_Wadeecharoen.pdf; http://etd.uum.edu.my/2574/

The international joint venture (IJVs) foreign investment has increased in the last three decades across all business sectors worldwide. IJVs represent one of the most popular strategies for firms from multiple countries to share risk and resources, to gain knowledge, and to obtain access to new markets. IJVs enable firms to bring in foreign expertise and then upgrade their operating competencies. Hence, IJVs play a significant role in the dynamic world economy, particularly Asian countries like Thailand. It can be shown in the double of Thai foreign investments in 2007 as compared to 2006 (27 billion baht in 2006 compared to 42.8 billion Baht in 2007) (Board of Thailand Investment, 2007). Despite the popularity of International Joint Venture (IJV) in developing countries such as Thailand, IJV performance remains unpredictable (Ding, 2004). Failure rates can go as high as 30% in certain countries (Makino & Beamish, 1998; Killing, 1980) and this is in trend with the 25% failure rate in Thailand (BOI, 2009). This study empirically examines the direct antecedents of IJV performance and the mediating role of relationship marketing orientation (RMO) on the marketing orientation (MO) and IJV performance linkage in Thailand. The four antecedents of IJV performance identified are cultural sensitivity, conflict management, MO, and RMO. 835 questionnaires mail distributed, 341 sets were received (41% response rate). Structure Equation Model (SEM) was performed for the actual analysis of the study. This study concludes by confirming three underlying predictors of IJV performance i.e. MO and RMO is significant predictors of IJV performance. Cultural and conflict management are not significant predictors of IJV performance. Relationship marketing orientation fully mediates the relationship between MO and conflict management with IJV performance but not culture sensitivity and IJV linkage. The result is discussed in the perspective of IJV firms in Thailand.