Resources and performance of international joint ventures: the moderating role of absorptive capacity

Purpose – Drawing on the resource‐based view and organizational learning theory, this study aims to examine the effect of resources and capabilities on international joint venture (IJV) performance. Design/methodology/approach – Departing from the extant research which largely assumes a bipartite relationship, the present study views an IJV as representing a tripartite relationship involving the IJV, its foreign parent and its local parent. Accordingly, it examines the effect of resources contributed by both foreign and local parents on IJV performance. It also examines how the IJV's absorptive capacity moderates the relationship between resource acquisition and performance. Findings – Results from a survey of 102 IJVs in China provide general support for the argument that performance of IJVs seems to be driven by the complementary resources of partner firms in combination with absorptive capacity of IJV. Originality/value – The findings from this study are useful for researchers interested in performance of iIJVs.