An event study of the effects of partner and location cultural differences in joint ventures

This study focuses on one of the most important aspects of domestic joint venture and international joint venture (IJV) formation: culture difference. The study adapts the Makino and Beamish (1998) ownership-structure classification of IJVs and empirically examines the effects of JV partner and JV location cultural differences. Using an event-study methodology, our results reveal the impact of cultural difference on shareholder value creation. The article discusses the implications of using cultural difference measures in international research.