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Article: Contractual incompleteness and the optimality of equity joint ventures

TitleContractual incompleteness and the optimality of equity joint ventures
Authors
KeywordsD23
Equity joint ventures
Equity shares
Incomplete contracts
L22
Profit-sharing contracts
Wholly-owned subsidiaries
Issue Date1998
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jebo
Citation
Journal Of Economic Behavior And Organization, 1998, v. 37 n. 4, p. 391-413 How to Cite?
AbstractFirms engaged in the pooling of complementary skills often choose the Equity Joint Venture (EJV) over alternative profit-sharing arrangements. This paper addresses the issue of how equity shares are different from profit shares. It is shown that, in settings of contractual incompleteness, marketable equity ownership, when compared to non-transferable profit-sharing contracts, provides better ex ante incentives to the parties involved by mitigating ex post hold-up problems. Among other things, the prevalence of the 51-49 or 50-50 EJV in which one party has 51 percent (or 50 percent) equity shares is explained.
Persistent Identifierhttp://hdl.handle.net/10722/85912
ISSN
2015 Impact Factor: 1.374
2015 SCImago Journal Rankings: 1.425
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorDasgupta, Sen_HK
dc.contributor.authorTao, Zen_HK
dc.date.accessioned2010-09-06T09:10:40Z-
dc.date.available2010-09-06T09:10:40Z-
dc.date.issued1998en_HK
dc.identifier.citationJournal Of Economic Behavior And Organization, 1998, v. 37 n. 4, p. 391-413en_HK
dc.identifier.issn0167-2681en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85912-
dc.description.abstractFirms engaged in the pooling of complementary skills often choose the Equity Joint Venture (EJV) over alternative profit-sharing arrangements. This paper addresses the issue of how equity shares are different from profit shares. It is shown that, in settings of contractual incompleteness, marketable equity ownership, when compared to non-transferable profit-sharing contracts, provides better ex ante incentives to the parties involved by mitigating ex post hold-up problems. Among other things, the prevalence of the 51-49 or 50-50 EJV in which one party has 51 percent (or 50 percent) equity shares is explained.en_HK
dc.languageengen_HK
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jeboen_HK
dc.relation.ispartofJournal of Economic Behavior and Organizationen_HK
dc.rightsJournal of Economic Behavior & Organization. Copyright © Elsevier BV.en_HK
dc.subjectD23en_HK
dc.subjectEquity joint venturesen_HK
dc.subjectEquity sharesen_HK
dc.subjectIncomplete contractsen_HK
dc.subjectL22en_HK
dc.subjectProfit-sharing contractsen_HK
dc.subjectWholly-owned subsidiariesen_HK
dc.titleContractual incompleteness and the optimality of equity joint venturesen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0167-2681&volume=37&spage=391&epage=413&date=1998&atitle=Contractual+Incompleteness+and+the+Optimality+of+Equity+Joint+Venturesen_HK
dc.identifier.emailTao, Z: ztao@hku.hken_HK
dc.identifier.authorityTao, Z=rp01097en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/S0167-2681(98)00117-6-
dc.identifier.scopuseid_2-s2.0-0040674746en_HK
dc.identifier.hkuros43992en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0040674746&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume37en_HK
dc.identifier.issue4en_HK
dc.identifier.spage391en_HK
dc.identifier.epage413en_HK
dc.identifier.isiWOS:000077689200001-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridDasgupta, S=7202154679en_HK
dc.identifier.scopusauthoridTao, Z=7201884505en_HK

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