Global Supply Network Embeddedness and Power: An Analysis of International Joint Venture Formations

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International Business Review

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As a subset of the international business literature, cross-border equity based partnerships have drawn significant academic attention. In the context of inter-firm partnerships, the power dynamics between parties and the implications that power has on the relational dynamics between firms is an important consideration. Research that connects power with network theory has recently emerged, suggesting that the network, as a source of power, plays a significant role in inter-firm dynamics. Yet, while there has been a substantial body of work either articulating the antecedents and consequences of power, little research has paid attention to the role that power plays in international JV formations; this presents a significant gap in the international business literature. Consequently, this study investigates the role that global network structure plays in the formation of new equity based international partnerships. Secondly, it contributes to the international JV literature by developing and testing a theoretical framework that examines inter-firm power dynamics as derived from the network position of each firm in the global network. Global network prominence, brokerage and weakness are key factors utilized in the analysis. The hypotheses are tested using a global manufacturing joint venture longitudinal dataset that contains 985,689 observations from 1985 to 2003. The results of the event history analysis indicate that for the manufacturer global network prominence, brokerage and weakness play an important role in new joint venture formations. On the other hand, only global network prominence is a significant factor for the potential partner.



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