A joint venture is a business arrangement in which two or more parties agree to pool their resources to accomplish a specific task. This task can be a new project or any other business activity. In a joint venture, each participant is responsible for the profits, losses, and costs associated with it. Joint ventures are often formed to enter new markets, develop new products, or pool resources for large projects that would be difficult or impossible for a single entity to undertake alone.
The J-curve effect is a useful concept for understanding the lag between a currency devaluation and the improvement in the trade balance.
Ann C. Logue, Britannica Money
In Simpler Terms
Think of a local food festival organized by several restaurants in your neighborhood. Each restaurant contributes something special—maybe one provides the venue, another the music, and others bring their signature dishes. Together, they create an event that draws a bigger crowd than any one of them could on their own, sharing the costs and the profits. That’s a joint venture in action: pooling resources for mutual benefit.
The venture itself is an independent entity separate from the participants’ other business interests. Unlike a merger or acquisition, a joint venture is a temporary partnership that typically dissolves once the project is completed or after a predetermined period.
