Operating Autonomy in Chinese-Foreign Joint Ventures

With asymmetries in resource contributions and uncertainty regarding local operations, the degree of operating autonomy given to a venture is a frequent source of conflict between JV parents. To what extent can JV managers decide for themselves, and when do they need parental approval? We analyze this pivotal question drawing on the resource dependence theory to explain how much autonomy was provided to Chinese-foreign JVs. We find that resource dependence on foreign parents' contributions provided a stronger explanation to JV operating autonomy than that of Chinese parents' contributions — the local parent allowed a higher level of autonomy to its JV in comparison to the foreign parent.