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Optimal Ownership Structures in Asymmetric Joint Ventures

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Author Info

  • Paul Belleflamme

    (Queen Mary and Westfield College, University of London)

  • Francis Bloch

    (Universit� Catholique de Louvain)

Abstract

This paper investigates the relation between asymmetries in the distribution of shares in joint ventures and asymmetries between the parent companies. When the joint venture and the parent companies are controlled by separate entities, we provide a simple formula to compute the optimal ownership structure. This formula is applied to various models of market interaction, showing that larger companies should have a larger fraction of shares, and so should companies whose goods are closer substitutes of the product of the joint venture, or companies who have a higher cost of transformation of the input produced by a joint venture.

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Bibliographic Info

Paper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 411.

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Date of creation: Apr 2000
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Handle: RePEc:qmw:qmwecw:wp411

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Related research

Keywords: Joint ventures; Strategic alliances; Ownership structure; Asymmetries;

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Cited by:
  1. MARINUCCI, Marco, 2008. "Optimal ownership in joint ventures with contributions of asymmetric partners," CORE Discussion Papers 2008023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Oliver Fabel & Dominique Demougin, 2004. "The Division of Ownership in New Ventures," Working Papers of the Research Group Heterogenous Labor 04-03, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  3. Paul Belleflamme, 2000. "R&D Cooperation or Competition in the Presence of Cannibalization," Working Papers 413, Queen Mary, University of London, School of Economics and Finance.
  4. Moskalev, Sviatoslav A. & Swensen, R. Bruce, 2007. "Joint ventures around the globe from 1990-2000: Forms, types, industries, countries and ownership patterns," Review of Financial Economics, Elsevier, vol. 16(1), pages 29-67.
  5. HEGE, Ulrich & HAUSWALD, Robert, 2002. "Ownership and control in joint ventures: theory and evidence," Les Cahiers de Recherche 750, HEC Paris.

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