Institutional context, bounded rationality and the termination of international joint ventures – insights from the Banca Barclays Castellini case, 1972–1980
Year: 2026
Type: article
Abstract: International joint ventures (IJVs) are a common entry mode for multinational firms but often end earlier than intended. This study examines Banca Barclays Castellini, an IJV between Barclays and Banca Castellini in Italy (1972–1980), to explain how an initially intentional termination became unintended. Drawing on extensive archival material and applying source-critical principles, the analysis traces how documented assessments, correspondence, and actions by key decision-makers responded to unfolding constraints. The interaction of Italy’s institutional environment and the bounded rationality evidenced in the records – such as limited information, experience, and foresight – contributed to the omission of termination provisions at the venture’s formation. As the IJV evolved, regulatory changes and contemporaneously expressed concerns about structural misalignments led the partners to adopt an option agreement enabling exit. The case shows how institutional context, bounded rationality, and contractual incompleteness jointly shaped the IJV’s life cycle, offering broader insights into IJV termination and strategic decision-making under uncertainty.
Source: Business History
Author: Qing Lu
Institution: University of Hull
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
Funder: British Academy of Management
Award: G2872005922
OpenAlex ID: W7203684106