This paper develops a theory of partnership formation between developing-country producers and developed-country headquarters. A developing-country producer can partner with either a local headquarters or a developed-country one; in the latter case, the producer gains from technology transfer, the headquarters gains from lower production costs, and both parties bear coordination costs. I show that developing-country producers with mid-range productivity engage in cross-border partnerships, while those at either end of the productivity distribution partner locally. The theory’s predictions are supported by firm-level evidence from China around the time of its WTO accession.