Characteristics of the International Joint Ventures in Bulgaria (1989-2003)

Purpose - Paradoxically to the devoted exceptionally research attention by the academic community to the strategic alliances in international business, the last empirical study of the basic characteristics of one of their types in Bulgaria - the international joint venture (IJV), dates back to 1991 and covers the period of centrally planned economy from 1981 until 1988, or giving a figurative expression, nowadays in the context of a transition to a market economy the IJV in Bulgaria are a peculiar terra incognita. In response to that need of new knowledge, the main purpose of the present study is to provide an analysis of the structural characteristics of these IJVs and the variation of their characteristics depending on the nationality of the foreign partners, coming from three regions: (1) Triad countries (USA, Western Europe and Japan); (2) Non-Triad countries; and (3) a Mixed region, encompassing combinations of partners from the above two regions Design/Methodology/Approach - For the attainment of the specified purposes, in cooperation of the author with the National Statistical Institute, a database has been created of the entire non-homogeneous population of 722 IJVs in Bulgaria for the 1989-2003 period, featuring 620 conventional or traditional IJVs, set up by foreign and local partners, with the emphasis of the study laid on these IJVs, and 102 non-conventional IJVs, formed by foreign partners alone. The advantage of this method for the establishment of a database in comparison with the predominant method of using information from the economic press consists in the overcoming of many shortcomings, which result in distortion of the results in the empirical studies. The trends in the characteristics of the IJVs in Bulgaria are deduced from the multi-dimensional distributions of the structural variables contained in the database, and are explained using predominantly a structural/systematic type of explanation and a comparative analysis with analogous variables in foreign studies of European or worldwide scope. Findings - The results of the study bear out the existence of common trends with the trends established in previous studies on conventional IJVs, in this case, set up by partners, whose nationality is from Triad countries and from Bulgaria, like: the overwhelming share of the IJVs, formed by two partners, and the unequal distribution of the equity among the partners. Diverging results have been found with respect to the industry investments made in trade, representing the industry, where the frequency of this type of IJVs is the greatest. On the other hand, it has been established that the non-conventional IJVs in Bulgaria, set up by partners, whose nationality is solely from Triad countries, despite of their predominant two-partner profile, show characteristics, different from the established global trends, related again to the trade industry, as well as to the unbalanced distribution of equity among the partners. Finally, an surprising trend is the taken second place by activity in the formation of IJVs in Bulgaria by the Russian partners right after the EU partners. Research Limitations/Implications - Notwithstanding the generalized results obtained, owing to the coverage of the entire population of IJVs, future studies regarding their characteristics in Bulgaria should have not only structural, but also motivational and outcome variables superimposed. Practical Implications - The research can serve for international comparative studies and for the elaboration of national and European Union policies regarding the creation of official databases on the IJVs, and on their basis for the development of consequential regulative policies due to the IJVs ambivalent roles. Originality/Value - With the presentation of new knowledge both on the conventional and on the non-conventional IJVs, based on disaggregated official information from the principal administrative register in Bulgaria, the present study extends and supplements the theme regarding the characteristics of the IJVs, a theme which has become established as one attracting the academic community researchers' interest in the 40-year long history of economic studies on this mode of implementing international transactions.