Strategic beginnings and strategic ends: formation motives as predictors of international joint venture termination modes

Purpose This study aims to examine how four international joint venture (IJV) formation motives – resource seeking, market seeking, efficiency seeking and strategic asset seeking – influence the subsequent choice among IJV acquisition, sell-off and liquidation. It develops an integrated explanation of IJV termination-mode choice by combining transaction cost theory (TCT) with resource-based, organizational learning and resource-dependence perspectives across the IJV lifecycle. Design/methodology/approach The hypotheses are tested using data on 128 terminated IJVs involving Nordic parent firms between 2000 and 2021. Multinomial logistic regression is used to compare the relative likelihood of acquisition, sell-off and liquidation. Findings IJV formation motives are systematically associated with subsequent IJV termination-mode choices. Resource-seeking IJVs are more likely to be liquidated, whereas market-seeking and efficiency-seeking IJVs are more likely to be acquired by the foreign parent. Strategic asset-seeking motives are not significantly associated with any particular termination mode. Research limitations/implications This paper is focused solely on Nordic multinational enterprises that terminated their IJVs, which might constrain the overall generalizability of the findings. Future research might investigate other regional settings and industry characteristics to validate and generalize the purported relationships. Practical implications Managers should consider potential IJV termination pathways when designing and governing IJVs rather than treating exit as an issue that arises only when the partnership ends. Understanding how IJV formation motives may shape eventual IJV termination choices can support more effective governance arrangements, contingency planning and contractual provisions specifying possible exit routes. Such preparation can reduce uncertainty, protect strategically important resources, and facilitate the orderly reallocation or transfer of control when the IJV is terminated. Originality/value This study connects largely separate literature on IJV formation and IJV termination by showing that the motives underlying IJV establishment remain relevant to governance choices at the end of the venture’s lifecycle. It extends existing explanations of IJV termination beyond TCT alone by showing how formation motives create different resource configurations, learning opportunities, partner dependencies and control requirements that shape the relative attractiveness of acquisition, sell-off, and liquidation. In doing so, the study moves beyond treating IJV termination as a homogeneous outcome and provides one of the first systematic tests of the relationship between IJV formation motives and alternative IJV termination modes.