IDEAS home Printed from https://ideas.repec.org/a/eme/igdrpp/v2y2009i2p126-140.html
   My bibliography  Save this article

Joint venture instability and monitoring

Author

Listed:
  • Prabal Roy Chowdhury

Abstract

Purpose - The purpose of this paper is to build a theory of joint venture formation and instability based on synergy and monitoring. Design/methodology/approach - This problem is formulated as a dynamic game and solved using the notion of subgame perfect Nash equilibrium. Findings - It was found that monitoring problems may prevent the joint venture from forming at all. Moreover, joint venture formation usually involves over‐monitoring, andex postcould involve cheating by one, or both the firms. Faced with the possibility of over‐monitoring, firms may choose to under‐invest in improving the input quality. The paper develops some testable implications of this theory. Originality/value - The contribution of this paper is both methodological, as well as in terms of generation of new insight. It provides a framework that allows one to analyze issues like both sided moral hazard, as well as monitoring in joint ventures. New insights are that monitoring issues can take several forms including over‐ and under‐monitoring by partner firms, and, there is a linkage between such monitoring problems and joint venture instability.

Suggested Citation

  • Prabal Roy Chowdhury, 2009. "Joint venture instability and monitoring," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 2(2), pages 126-140, September.
    • Handle: RePEc:eme:igdrpp:v:2:y:2009:i:2:p:126-140
    DOI: 10.1108/17538250910992559
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538250910992559/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538250910992559/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/17538250910992559?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aritra Saha & Utpal Chattopadhyay, 2015. "The Impact of International Joint Venture on Local Economy: A Case Study of Hero Honda," South Asian Journal of Business and Management Cases, , vol. 4(1), pages 14-26, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:igdrpp:v:2:y:2009:i:2:p:126-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.