Performance of European joint ventures in Latin America, Asia and Eastern Europe

The aim of this paper is to examine the internationalization joint ventures formed in emerging countries. More precisely, this consists in studying their survival rate and to relate it to variations in the relevant country risk of the emerging countries concerned. we will detail the method used for gathering and analyzing data and the characteristics of a sample of 139 internationalization joint ventures that were formed during year 1996 by foreign partners from the European Union and local partners belonging to different emerging countries (mainly Latin American, Asian and eastern European countries). The survival analysis was applied to a sample of 139 joint ventures, together with a log-logistic analysis of the impact of different country risk variables on the hazard rate of these joint ventures. Time-related variations were observed in their termination rate (i.e., inverted double U variation) and their hazard rate (i.e., curvilinear distribution with honeymoon effect). Concerning the impact of country risk, the results obtained provided only a partial confirmation of this impact: the relation between country risk and the joint venture survival is confirmed empirically, but only when the emerging country concerned undergoes deterioration of its risk as time progresses. In conclusion, the relation between these two variables exists but it is a discontinuous one