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Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures. Author info | Abstract | Publisher info | Download info | Related research | Statistics Chong-En Bai ()
Zhigang Tao ()
Changqi Wu ()
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This paper presents a model of the joint venture that is grounded in the stylized facts we found from a sample of 200 joint venture contracts. The model incorporates the revenue-sharing contract into the incomplete contract frameworks of Grossman-Hart-Moore Property Rights Theory and the Transaction Cost Theory of the firm, and emphasizes the impact of expropriation. Joint control can be optimal as well as unilateral control. Our econometric analysis of the revenue-sharing and control arrangements o?ers strong support to our Property-Rights-Theory motivated model with self investment but rejects that with cooperative investment. The Transaction-Cost-Theory motivated model leaves some important empirical findings unexplained. Our findings also reject some of the existing theories of joint ownership.
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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number
2003-563.
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Length: 73 pages
Date of creation: 20 Jun 2003Date of revision:
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Keywords: Joint Ventures ; Control Right ; Revenue-Sharing Contracts ; Expropriation ; Theory of the Firm ; Other versions of this item:
Find related papers by JEL classification: D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
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