Knowledge creation through joint venture investments: The contingent role of organizational slack

Drawing on the literature on joint venture learning, we propose that a parent company's investment in joint ventures (JVs) is central to understanding knowledge learning and the firm's consequent performance. This study suggests that there is an inverse U-shaped relationship between the number of JV investments and knowledge creation. Moreover, a parent company's absorbed slack, unabsorbed slack and experience with JVs suppress the negative effects of higher JV investments on knowledge creation. Poisson, negative binomial and generalized two-stage least squares regressions are used to test the hypotheses in a panel data of 2734 firm-year cases. The findings support our predictions.