Abstract:
The primary reason why foreign and local partners form international joint ventures is the sy nergy between their different competencies. However, such enterprises may break up due to a
host of endogenous and exogenous factors. The evidence indicates that inter-partner learning of
each other’s competencies during operation of the enterprise is an important reason for JV in stability. This paper contributes to the theory of JV formation and instability founded on synergy
and inter-partner learning. We show that the JV is likely to break up if the learning effect is
stronger than the synergy effect. Finally, we provide a comparative static analysis
