IDEAS home Printed from https://ideas.repec.org/a/bla/scandj/v101y1999i4p651-672.html
   My bibliography  Save this article

Partnerships, Buy‐Out Options and Investment in Emerging Markets

Author

Listed:
  • H. Peter Møllgaard
  • Per Baltzer Overgaard

Abstract

Asymmetric information and fear of acquiring a “lemon” may explain the paucity of foreign investment in emerging market economies. If investors are uncertain about the profitability of investments, intrinsically inefficient, temporary partnerships or joint ventures may serve as mechanisms through which information is transmitted. Temporary partnerships with joint investments by the domestic firm and the investor, together with a buy‐out option to the investor, may sometimes separate good and bad investment prospects in equilibrium. However, separating equilibria may fail to exist. Implications for foreign direct investment are traced and briefly related to the experience of transition economies. JEL classification: D8; F2; L14; O12

Suggested Citation

  • H. Peter Møllgaard & Per Baltzer Overgaard, 1999. "Partnerships, Buy‐Out Options and Investment in Emerging Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 651-672, December.
    • Handle: RePEc:bla:scandj:v:101:y:1999:i:4:p:651-672
    DOI: 10.1111/1467-9442.00178
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-9442.00178
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-9442.00178?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • F2 - International Economics - - International Factor Movements and International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    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:bla:scandj:v:101:y:1999:i:4:p:651-672. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.