What makes a joint venture: Micro-evidence from Sino-Italian contracts
This paper provides new contract-level evidence on control rights allocation in order to define what makes a joint venture. Property rights theory of the firm identifies circumstances under which joint control alleviates investment distortions due to contract incompleteness. We compare predictions of the theoretical literature with actual governance structures of Sino-Italian joint ventures, as reported in a questionnaire submitted to the entire population of Italian enterprises operating in China. With an exceptional response rate of 60%, our evidence confirms most of the theoretical predictions and helps select among competing approaches to model joint ventures.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hart, Oliver D, 1988.
"Incomplete Contracts and the Theory of the Firm,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 4(1), pages 119-39, Spring.
- Chong-En Bai & Zhigang Tao & Changqi Wu, 2003.
"Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures.,"
William Davidson Institute Working Papers Series
2003-563, William Davidson Institute at the University of Michigan.
- Chong-En Bai & Zhigang Tao & Changqi Wu, 2004. "Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 277-305, Summer.
- Hagedoorn, John, 2002. "Inter-firm R&D partnerships: an overview of major trends and patterns since 1960," Research Policy, Elsevier, vol. 31(4), pages 477-492, May.
- Hauswald, Robert & Hege, Ulrich, 2003.
"Ownership and Control in Joint Ventures: Theory and Evidence,"
CEPR Discussion Papers
4056, C.E.P.R. Discussion Papers.
- HEGE, Ulrich & HAUSWALD, Robert, 2002. "Ownership and control in joint ventures: theory and evidence," Les Cahiers de Recherche 750, HEC Paris.
- Grossman, Sanford J. & Hart, Oliver D., 1986.
"The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
3450060, Harvard University Department of Economics.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
- Gomes-Casseres, Benjamin, 1989. "Ownership structures of foreign subsidiaries : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 11(1), pages 1-25, January.
- Oliver Hart & John Moore, 1988.
"Property Rights and the Nature of the Firm,"
495, Massachusetts Institute of Technology (MIT), Department of Economics.
- Nunn, Nathan, 2007.
"Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade,"
4686801, Harvard University Department of Economics.
- Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 569-600, 05.
- Nathan Nunn, 2005. "Relationship Specificity, Incomplete Contracts and the Pattern of Trade," International Trade 0512018, EconWPA.
- Comino, Stefano & Nicolò, Antonio & Tedeschi, Piero, 2010.
"Termination clauses in partnerships,"
European Economic Review,
Elsevier, vol. 54(5), pages 718-732, July.
- Stefano Comino & Antonio Nicolò & Piero Tedeschi, 2006. "Termination Clauses in Partnerships," Working Papers 20060505, Università degli Studi di Milano-Bicocca, Dipartimento di Statistica.
- Stefano Comino & Antonio Nicolò & Piero Tedeschi, 2005. "Termination Clauses in Partnerships," Industrial Organization 0509007, EconWPA.
- Wei, Yingqi & Liu, Bo & Liu, Xiaming, 2005. "Entry modes of foreign direct investment in China: a multinomial logit approach," Journal of Business Research, Elsevier, vol. 58(11), pages 1495-1505, November.
- Javorcik, Beata Smarzynska & Saggi, Kamal, 2004.
"Technological asymmetry among foreign investors and mode of entry,"
Policy Research Working Paper Series
3196, The World Bank.
- Beata S. Javorcik & Kamal Saggi, 2010. "Technological Asymmetry Among Foreign Investors And Mode Of Entry," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 415-433, 04.
- 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.
- Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, March.
- Stephanie Rosenkranz & Patrick W. Schmitz, 2004.
"Joint Ownership And Incomplete Contracts: The Case Of Perfectly Substitutable Investments,"
Schmalenbach Business Review (sbr),
LMU Munich School of Management, vol. 56(1), pages 72-89, January.
- Rosenkranz, Stephanie & Schmitz, Patrick W, 2001. "Joint Ownership and Incomplete Contracts: The Case of Perfectly Substitutable Investments," CEPR Discussion Papers 2679, C.E.P.R. Discussion Papers.
- Nöldeke, Georg & Schmidt, Klaus M., 1998.
"Sequential investments and options to own,"
Munich Reprints in Economics
19327, University of Munich, Department of Economics.
- Morresi, Ottorino & Pezzi, Alberto, 2011. "21 years of international M&As and joint ventures by Italian medium-sized listed firms: Value creation or value destruction?," Research in International Business and Finance, Elsevier, vol. 25(1), pages 75-87, January.
- Raff, Horst & Ryan, Michael & Stähler, Frank, 2009. "Whole vs. shared ownership of foreign affiliates," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 572-581, September.
- Valeria Gattai, 2012. "Chinese ODI in Italy: an empirical investigation at the firm-level," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 10(1), pages 47-66, October.
- Bontempi, Maria Elena & Prodi, Giorgio, 2009. "Entry strategies into China: The choice between Joint Ventures and Wholly Foreign-Owned Enterprises: An application to the Italian manufacturing sector," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 11-19, January.
- Maija Halonen, 2002. "Reputation And The Allocation Of Ownership," Economic Journal, Royal Economic Society, vol. 112(481), pages 539-558, July.
- Jean-Fran�ois Hennart & Jorma Larimo, 1998. "The Impact of Culture on the Strategy of Multinational Enterprises: Does National Origin Affect Ownership Decisions?," Journal of International Business Studies, Palgrave Macmillan, vol. 29(3), pages 515-538, September.
- Valeria Gattai, 2008.
"A Tale of Three Countries: Italian, Spanish and Swiss Manufacturing Operations in China,"
The World Economy,
Wiley Blackwell, vol. 31(8), pages 969-992, 08.
- Valeria Gattai, 2006. "A Tale of Three Countries: Italian, Spanish and Swiss Manufacturing Operations in China," Working Papers 2006.150, Fondazione Eni Enrico Mattei.
- Cai, Hongbin, 2003. " A Theory of Joint Asset Ownership," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 63-77, Spring.
- Maskin, Eric & Tirole, Jean, 1999. "Two Remarks on the Property-Rights Literature," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 139-49, January.
- Linda Yueh, 2010. "Thirty years of legal and economic reform in China: growth, institutions, and laws," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(2), pages 117-132.
- Shige Makino & Kent E Neupert, 2000. "National Culture, Transaction Costs, and the Choice Between Joint Venture and Wholly Owned Subsidiary," Journal of International Business Studies, Palgrave Macmillan, vol. 31(4), pages 705-713, December.
When requesting a correction, please mention this item's handle: RePEc:eee:revfin:v:22:y:2013:i:4:p:194-205. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.