Control and Performance in Sino-Foreign Equity Joint Ventures

The results of a questionnaire survey of 174 Sino—foreign EJVs and personal interviews with 40 managers and Chinese government of ficials revealed that foreign parents ranked control differently depending on whether they had majority, equal or minority stakes in EJVs. Regardless of equity level, ‘the right to appoint the general manager’, ‘board meetings’ and ‘auditing’ were viewed as important control mechanisms. Positive relationships were also found between foreign parents’ control over their EJVs and both their and Chinese parents’ satisfaction with EJV performance.