Balancing IJV knowledge contributions and trust needs

Purpose – This paper aims to present a model that explains how knowledge contributions of international joint venture (“IJV”) partners can be balanced or imbalanced, which affects each partners’ trust needs, with implications for future partner relationships. Design/methodology/approach – Illustrative examples aid in explaining propositions associated with the knowledge/trust needs balance model. In addition, consideration is given to the trust-building complication of liability of foreignness and the implications balance or imbalance. Findings – In total, 12 illustrative cases are evaluated to determine whether the knowledge contributions of the IJV partners are balanced. Knowledge intensity associated with the venture is assessed to determine the value of the foreign firm partner’s knowledge contribution. Cultural distance between the relevant countries provides a measure of the host country partner’s knowledge contribution. Balance is assessed after factoring in mitigating partner experience. The cases provide examples of four different balance/imbalance situations. Practical implications – A critical aspect of a successful IJV is knowledge sharing and trust is required for the freest flow of information. It is important for firms entering into IJVs to more fully understand the relationship between the knowledge contributions of IJV partners and trust. When knowledge contributions are more evenly balanced, the relationship between the partners will be stronger. Originality/value – The paper distinguishes between balance and stability/instability, expands the literature on knowledge intensity and contributes the new concept of trust needs. Balance at the start of an IJV has implications for the future relationship of the partners.