Control Mechanisms and Knowledge Acquisition in International Joint Ventures

This study examines the impact of control mechanisms on knowledge acquisition in international joint ventures (IJVs). Data were collected by a survey in Korea, where knowledge acquisition from foreign investors is particularly critical to further upgrade its economy. We attempt to explore the ownership - knowledge acquisition links and find that equally shared ownership is the most favorable organizational structure for knowledge acquisition from the foreign parent. In addition, most of the control mechanisms (i.e., ‘foreign parents’ participation in the policy and planning process’, ‘staffing the top management positions by foreign parents’, ‘participation of foreign expatriates in key functional areas’ and ‘foreign parents’ socialization with venture managers through active training’) have a positive association with knowledge acquisition. We also find partial support for the effects on ‘incorporation into foreign parents’ network’ and ‘communication between top managements and foreign parents’. This study contributes to the body of control mechanism literature and the understanding of IJVs, and the role of foreign parents in transferring knowledge.