Two-sided effects of state equity: The survival of Sino–foreign IJVs

We replicate and extend Mohr et al.’s work (Journal of International Business Studies 47: 408–426, 2016), which hypothesized that increased state participation in the equity of international joint ventures (IJVs) decreased dissolution likelihoods, as tested with a sample of 623 Sino–foreign IJVs in the 1985–2009 period. Given the rapid developments in China’s economy and its institutional environment, we ask the question of whether the effects in Mohr et al. (2016) can be observed over a long period of time. We examine the generalizability of their findings (1) by replicating their study with a larger sample from the same data source, and over a longer period (1985–2017), and (2) by studying a sample of 803 IJVs from the same population but from another data source (the Annual Census of Chinese Industrial Enterprises) in the 2000–2017 period. We find that state equity can benefit IJV survival from favorable regulatory support, but it can also lead to lower survival rates due to unfavorable governmental intervention. Overall, we advocate a two-sided effect of state equity that leads to a curvilinear relationship between state equity and IJV dissolution, where time is an important boundary condition.