A joint venture is the combined effort of two or more business entities for a limited purpose. Joint ventures are frequently established for coordinated research, international expansion, and specialized PRODUCTION. Creating a joint venture involves both legal and strategic MANAGEMENT implications. In the United States, joint venture agreements are similar to PARTNERSHIPs. Generally partnership law applies to joint ventures, including personal LIABILITY for its debts and treatment for federal income-tax purposes. The most significant difference between a joint venture and a partnership is that participants in a joint venture usually have less implied and apparent authority than partners, because of the limited nature of the joint-venture activity. For example, a joint venture among pharmaceutical companies to conduct research would limit the actions and decisionmaking authority of managers to research-related activities, and not include marketing or production decisions. Joint ventures are also scrutinized under ANTITRUST LAW. Joint ventures, by definition, involve integration of resources between or among firms. Joint ventures hope to yield improved efficiencies through collective effort, more than could be achieved by any one firm. While a joint sales agency created to fix prices would be illegal, a joint research and development venture is more likely be legal. In 1984 Congress passed the National Cooperative Research Act (NCRA), requiring firms contemplating a joint RESEARCH AND DEVELOPMENT venture to notify the Department of Justice and the FEDERAL TRADE COMMISSION in advance. The act limited the antitrust liability of firms engaged in joint research and development ventures. The act was later amended to include joint production ventures as well. Joint ventures often enter into strategic management decisions when they are used or considered in international expansion. Frequently U.S. businesses expanding abroad will choose to form joint-venture agreements with host-country firms. After the passage of the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) in 1994, many U.S. firms entered Mexican markets through joint ventures. Wal-Mart partnered with Cifra, a chain of discount stores in Mexico, which provided knowledge of local markets, customs, rules, and regulations, as well as an existing distribution system. Wal-Mart provided financial RESOURCES, buying power, and systems management experience and efficiency. Some U.S. firms entered Mexico through jointventure agreements and then bought out their partner or expanded on their own. Management specialist caution companies entering into joint ventures to carefully define the rights and responsibilities of each participant and to develop a working relationrelationship before entering into a joint venture. In the 1990s, many U.S. firms rushed into joint ventures as a means to enter the Chinese market, only to be disappointed with the results.