Partner Selection and Trust Building in West European–Russian Joint Ventures

Partnerships are a common strategy for entering new countries. This entry strategy has some peculiarities of its own. On the one hand, having a local partner may reduce the entry risk faced by the company as well as its level of committed resources. This offers an advantage when country risk is high and when the familiarity with the host country is low (Hill, Hwand, and Kim, 1990). On the other hand, partnerships are difficult to manage, especially when there are significant cultural differences between the partners (Perlmutter and Heenan, 1986). Direct investment in Russia involves a high risk for west European companies (WECs). First, investing in Russia involves significant country risk, mainly because of political instability, lack of infrastructure, lack of laws governing and protecting business interests, and difficulties in obtaining supplies and raw materials (McCarthy, Puffer,