The perceived effect of accounting controls on U.S.-Chinese joint venture transaction costs and performance

Peter Chalos, Neale O'Connor

Research output: Contribution to journalArticleResearchpeer-review


Research in international joint ventures speculates that partner transaction risks attributable to information asymmetries, asset specific investments, and strategic objectives adversely affect alliance performance. This study empirically examines these claims. The impact of accounting controls on the reduction of transaction costs and on alliance performance is also investigated. Contractual controls that are examined include equity control, majority board governance, and legal safeguards. Managerial controls examined include decision rights, incentives, communications, and financial planning. Results of the study confirm that transaction costs decrease performance. Contractual and managerial accounting controls significantly reduce the negative impact of partner transaction costs and are positively associated with joint venture performance.
Original languageEnglish
Pages (from-to)53-73
Number of pages21
JournalJournal of International Accounting Research
Issue number2
Publication statusPublished - 2005
Externally publishedYes

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