Achieving Value Co-creation through Cooperation in International Joint Ventures: A Two-level Perspective

How can International Joint Ventures (IJVs) achieve strategic objectives and enhance value co-creation? Based on a resource-based view and goal setting theory, this study examines whether cultural compatibility and parent companies' asset complementarity foster top-level cooperation and operating-level cooperation in IJVs and investigates the underlying mechanisms (i.e., top-level shared goals and operating-level shared goals) in the relationship. This study also scrutinizes the differing roles of top-level and operating-level cooperation on value co-creation in IJVs. The findings from a survey of 200 IJVs in China show that cultural compatibility positively affects top-level cooperation mainly through top-level shared goals, while asset complementarity positively affects operating-level cooperation through operating-level shared goals. Furthermore, both top-level cooperation and operating-level cooperation have positive effects on value co-creation, but the operating-level cooperation effect is stronger. However, geographical distance can weaken the positive effect of top-level cooperation more than operating-level cooperation, whereas local market legitimacy can strengthen the positive effect of operating-level cooperation to a greater degree. This study offers fresh insights into IJV cooperation and value co-creation by introducing a two-level perspective and provides important managerial implications for the sustainable development of IJVs.