A Study On The Instability And The Influence Factors Of International Joint Ventures

International Joint Ventures (IJVs) is the most common way and the fastest growing of the Multinational Corporation (MNC) to develop overseas, and also an important form to utilize foreign investment of the host coountry. On the background of economic globalization, the IJVs is a win-win choice of the MNC and the host corporation.Since reform and opening up, China is gradual integration into the world economy, globalization process. Owing to rapid economic development, gradually infrastructure improving, political and social environments tend to stability, and improving investment environment in China, more and more forengn derect investment flows into China. Sino-foreign joint venture has been an important form of utilizing foreign investment all the time. However, as economy continues to develop and market conditions to improve in China, more and more instability phenomenons emerge, such as Sino-foreign joint ventures controlled or buyed by MNCs, even disintegration. It's true that the nature of IJVs is a form of instability, but the instability in joint venture is not conducive to the host contries's utilizing of foreign investment and the healthy development of host corportions.In order to make better use of Sino-foreign joint ventures to China's economic construction, this dissertation studies on the instability of IJVs. This dissertation pays attention to the host corporation which is be on inferior position and applys the game theory and demonstration method to reaserch on the instability of IJVs, and hope to allow Chinese corporations participating in Sino-foreign joint ventures to recognize the essential characteristics of the instability and to take appropriate measures to cope with IJVs'development and deserve access to the proceeds. This dissertation hopes to provide a reference for the setting up and management of IJVs, better promote national, regional, and industrial steady growth.The main contributions of the research are as follows.①With the application of game theory and on the basis of Cobb–Douglas production function, construct income and allocation model of IJVs with the technology transfer allowances ratio. Through Nash bargaining solution get the optimal ownership structure, and analyse the influence of the optinal ownership structure on the instability of IJVs.②On the basis of income and allocation model of IJVs with the technology transfer allowances ratio, analyse the influence on the instability while there is unilateral technological innovation, both members technological innovation,③On the basis of income and allocation model of IJVs with the technology transfer allowances ratio, it analyses IJVs's moral hazard in the complete competitive and complete monopoly market, compare them and get the results of the influence of degree of market compete on the IJVs's instability;④With the application of evolutionary game theory and by introducing the "drift" to describe environmental uncertainty of IJVs, combined with "Centipede Game" model, the paper analyses the dynamic evolution of IJVs's instability and the influences of several factors on the IJVs's instability.⑤On the basis of the analyses the game model, establishes several hypothesises. With the application of survival analyse mothod, using the sample of 575 Sino-foreign joint ventues, tests the conclusions drawed in previors chapters.The main features and innovations are as follows.①This dissertation brings the technology transfer allowances ratio into income and allocation model of IJVs, and analyses the influences of the technological innovation and the the comparative degree of the market on the instability of IJVs. According to Cobb-Douglas production function, this dissertation constructs income and allocation model of IJVs with the technology transfer allowances ratio. Through Nash bargaining solution gets the optimal ownership structure. On this basis, analyses the influence on the allocation of the equity and the instability of the partners'technological innovation and the maket comparative degree.②This dissertation uses the drift to portray the uncertainty of environment and studys the influence of the environment uncertainty on the instability of IJVs. This dissertation introducts the"drift"to portray the uncertainty of IJVs'external environment, and on the bounded rationality of the partners in IJVs, with the application of evolutionary game theory, establishes the "Centipede Game" model with"drift", and studies the influences of the environment's uncertainty on the opportunism behavior and the instability of IJVs.③This dissertation introducts the time dependent variables into the Cox proportional hazard model, and applies the survival analysis to test the conclusions of the models in foregoing chapters. Based on the sample of 575 Sino-foreign joint ventures established in years 1984-2006, the application of Cox proportional hazard model, and introduction of the time dependent variables, the survival analysis tests the relevant conclusions of the game model.