Are joint-ventures and their parent firms more closely related in terms of skill-relatedness than in terms of value-chain?

The distance between joint-ventures and their parent firms is a fairly new topic of research in the field of diversification. In the process of determining the actual parent firm of a joint-venture out of all alternative industries, it turned out that both vertical- and skill-relatedness proved to be significant. The results further indicate that skill-relatedness is more predictive in this process than vertical relatedness and that joint-ventures are more likely to have parents that have skill overlap to their primary activity than industries that do not. These results hold for the entire sample and a subsample of manufacturing firms. Another finding is that joint-ventures tend to have at least one parent that is closer related in terms of skills than the parent are with each other. Suggesting that joint-ventures are a mechanism to reduce cognitive distance and increase the absorptive capacity of the new knowledge being transferred for at least one firm.