The Role of Anti-foreigner Sentiments for IJV Performance

In recent years, sentiments have been shifting towards nationalist attitudes and increasing anti-foreigner sentiments. Such sentiments can spill over to MNCs given MNCs’ embeddedness in their home-country environment, and can hence be reflected in the behaviors of organizational members. We argue that especially in IJVs where partner firms come from foreign countries, conflicts due to anti-foreigner sentiments can be apparent. Building on social identity theory, we theorize that negative sentiments against foreigners lead to pronounced in-group favoritism and stereotyping, make the relationships between IJV partners more difficult, and directly influence the success of the operation. What is more, we hypothesize that contact and interaction between IJV partner firms decrease the negative relationship between anti-foreigner sentiments and IJV performance. Using hierarchical linear modeling on a sample of 9,000 observations from 1993 to 2017, we find a negative effect on the success of IJVs but that long collaboration with the IJV partner and a more equally shared organization mitigate the negative influence.