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What makes a joint venture: micro evidence from Sino-Italian contracts

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  • Valeria Gattai
  • Piergiovanna Natale

Abstract

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.

Suggested Citation

  • Valeria Gattai & Piergiovanna Natale, 2012. "What makes a joint venture: micro evidence from Sino-Italian contracts," Working Papers 218, University of Milano-Bicocca, Department of Economics, revised Jan 2012.
  • Handle: RePEc:mib:wpaper:218
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    References listed on IDEAS

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    Cited by:

    1. Müller, Daniel & Schmitz, Patrick W., 2016. "Transaction costs and the property rights approach to the theory of the firm," European Economic Review, Elsevier, vol. 87(C), pages 92-107.
    2. Valeria Gattai & Piergiovanna Natale, 2017. "A New Cinderella Story: Joint Ventures And The Property Rights Theory Of The Firm," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 281-302, February.
    3. Schmitz, Patrick W., 2016. "The negotiators who knew too much: Transaction costs and incomplete information," Economics Letters, Elsevier, vol. 145(C), pages 33-37.
    4. Xiaolan Fu & Peter J. Buckley & Diego Sanchez-Ancochea & Ines Hassan, 2022. "The world has a unique opportunity: Accelerating technology transfer and vaccine production through partnerships," Journal of International Business Policy, Palgrave Macmillan, vol. 5(3), pages 406-415, September.

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    More about this item

    Keywords

    contract incompleteness; China; Italy; joint venture;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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