Why Do Multinational Firms Seek Out Joint Ventures?

This paper uses a model of dichotomous choice to distinguish the characteristics of Swedish multinational firms that seek out joint ventures from those that do not. The findings suggest that firms with little experience of foreign production and highly diversified product lines are the most likely to share equity. In general, it is found that multinational firms that have the most to offer the developing countries are reluctant to enter into joint venture agreements. Therefore, imposing joint-venture status on multinationals may prevent the inflow of advanced technologies.