Resource Commitment, Entry Timing, and Market Performance of Foreign Direct Investments in Emerging Economies: The Case of Japanese International Joint Ventures in China

Resource Commitment, Entry Timing, and Market Performance of Foreign Direct Investments in Emerging Economies: The Case of Japanese International Joint Ventures in China

By
Takehiko Isobe, Shige Makino, David Bruce Montgomery
Academy of Management Journal. June
2000, Vol. 43, Issue 3, Pages 468-484

This study examined whether early movers and technology leaders attained superior performance in emerging economic regions. We assessed the determinants and performance consequences of two key aspects of entry strategy, resource commitment to technology transfer and timing of entry, using survey data from over 220 Sino-Japanese joint ventures (JVs) in China. Both high commitment and early entry has positive impacts on the perceived economic performance of the JVs. Yet these relationships were found to be significantly contingent on several internal and external factors, such as the strategic importance of an investment, parental control of a JV, and the availability of supporting local infrastructure.