IDEAS home Printed from https://ideas.repec.org/p/iso/wpaper/0138.html
   My bibliography  Save this paper

Shared Ownership versus Third-Party Ownership

Author

Listed:
  • Stephan Nüesch

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Egon Franck

    () (Institute for Strategy and Business Economics, University of Zurich)

Abstract

Competitive advantage is based on a unique nexus of firm-specific investments that creates inimitable quasi-rents. Because of the impossibility of writing complete contracts, the distribution of the quasi-rents is vulnerable to opportunistic and inefficient behavior. This paper discusses two corporate governance models as institutional safeguards: shared ownership that assigns the rights of residual control to the firm-specific investors, and thirdparty ownership that assigns the rights of residual control to independent fiduciaries. Shared ownership entails higher costs of collective decision-making but lower agency costs than third-party ownership. The paper presents testable propositions, conditional on contextual factors, on which model is better able to incentivize firm-specific investments.

Suggested Citation

  • Stephan Nüesch & Egon Franck, 2010. "Shared Ownership versus Third-Party Ownership," Working Papers 0138, University of Zurich, Institute for Strategy and Business Economics (ISU).
  • Handle: RePEc:iso:wpaper:0138
    as

    Download full text from publisher

    File URL: http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/138_ISU_full.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Gerald Eisenkopf & Stephan Nüesch, 2016. "Third Parties and Specific Investments," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 17(2), pages 151-172, August.

    More about this item

    Keywords

    Corporate Governance; Firm-Specific Investments; Residual Rights of Control; Third-Party Ownership;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:iso:wpaper:0138. 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: (IBW IT). General contact details of provider: http://edirc.repec.org/data/isuzhch.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.