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Optimal Ownership Regime in the Presence of Investment Spillovers

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  • Valeria Gattai
  • Piergiovanna Natale

Abstract

In the context of the property rights theory of the firm, we study the role of investment spillovers in shaping the efficiency ranking of ownership regimes. In our model, spillovers arise from asset-embodied investment and footloose investment. Under the former, the benefits of investment can be appropriated only through asset control; under the latter, the benefits of investment can be appropriated independently of asset control. Our model predicts that asset-embodied investment favors the adoption of non-integration, while joint ownership may prevail in the presence of footloose investment.

Suggested Citation

  • Valeria Gattai & Piergiovanna Natale, 2016. "Optimal Ownership Regime in the Presence of Investment Spillovers," Working Papers 332, University of Milano-Bicocca, Department of Economics, revised 29 Mar 2016.
  • Handle: RePEc:mib:wpaper:332
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    References listed on IDEAS

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    More about this item

    Keywords

    Incomplete contracts; Property rights; Investment spillovers; Joint-control;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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