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... 1 What is a joint venture?
There is no legal definition of a joint venture. ... In an international joint venture, the participants will be based in different countries or the business venture itself will be spread over different countries. ... 2 Why establish an international joint venture?
There are various reasons why international joint ventures are formed. ... Joint ventures assist in building a closer relationship with a local company. In countries where foreign investment opportunities are limited, a joint venture with a local firm may offer the only opportunity for a foreign investor. Western investors who are looking to form joint ventures with businesses in Central and Eastern European countries and countries used to be part of the Soviet Union will normally want to obtain a market position in those countries before their competition does the same. Joint ventures are a useful vehicle between developed countries with a market economy and other countries seeking to develop market economies.
One interesting reason for setting up a joint venture is its use for large intergovernmental projects which cannot be funded by one country alone. Consortia to develop, for instance, aviation projects such as the European Airbus have been formed by joint ventures between countries.
In the energy sector, international joint ventures are very common. ... Hence, even the largest players in the market look for international joint venture partners for large projects.
Joint ventures exist throughout all sectors of the industry. A joint venture would be formed in the aerospace, civil engineering or defence sectors where the up-front research and development costs involved in projects undertaken by such joint ventures are simply too large to be borne by just one company. One can think of many examples of joint ventures being entered into because of the sheer size of the projects involved. ... Strategic alliances run the range from formal joint ventures, in which two or more firms have equity stakes (e.
Approximate Word count = 1985
Approximate Pages = 7.9
(250 words per page double spaced)
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