Exploring the development of supply chain international joint ventures

Purpose The purpose of this paper is to empirically explore how prior exchange relationships may impact a local firm's decision to participate in a supply chain international joint venture (SC‐IJV). Design/methodology/approach An exploratory study of the influence of prior working relationships using a sample of 32 US and European‐based SC‐IJVs. First, a cluster method was used to determine the two categories of local firms' motivation to form SC‐IJVs with foreign partners. Next, a discriminant analysis revealed the differences between the two categories in terms of the emphasis put on prior exchange relationships when forming SC‐IJVs. Findings Results confirm two major types of motivations for a local firm to participate in a SC‐IJV: exploration and exploitation. Moreover, the motivation types are varied in terms of the emphasis placed on a prior working relationship with the SC‐IJV partner. While exploitation‐oriented firms consulted a previous working relationship experience before forming a supply chain IJV, exploration‐oriented firms did not. Originality/value This study shows that Eastern European firms can be separated into two categories in terms of SC‐IJV goals: those focused on learning (exploration) and those focused on strategic behavior (exploitation). Second, the study shows that the firms favoring exploitation prefer a past working relationship with the potential partner, while those favoring exploration did not. The study is exploratory in nature, but provides a solid platform on which to base future research.