Exploring instances of deviation in joint ventures between partners' equity share and board representation

Purpose To date, there has been little research about the degree of correspondence between partner equity ownership and partner representation on boards of joint ventures (JVs). It is generally assumed that partners' share equals board representation in percentage. This paper aims to explore various instances of deviation from the above norm. Design/methodology/approach Using a unique database of 259 JV contracts extracted from the US Securities and Exchange Commission, and by drawing from resource dependency and transaction cost theories, this manuscript explores the factors that increase or decrease the deviation between equity share and board representation. Findings The results show that international JVs (IJVs) tend to deviate more, while JVs with a deadlock clause, a large board and based in a stable country deviate less from the degree of correspondence between equity share and board representation. Originality/value This study contributes to the alliance and governance literatures by identifying factors that influence the degree of correspondence between partner investment (equity share) and control through board of director representation.