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Foreign equity caps for international joint ventures

Author

Listed:
  • Yasunobu Tomoda

    (Graduate School of Economics and Business Administration, Hokkaido University)

  • Hiroshi Kurata

    (Graduate School of Economics and Business Administration, Hokkaido University)

Abstract

We analyze foreign equity caps for international joint ventures. We develop a partial equilibrium model in which foreign equity caps are determined endogenously and find an interesting property, named a welfare indifference property i.e., maximization of domestic welfare and that of world welfare are indifferent for the host government. This property also implies that the government is indifferent to the distribution of a JV's profit.

Suggested Citation

  • Yasunobu Tomoda & Hiroshi Kurata, 2004. "Foreign equity caps for international joint ventures," Economics Bulletin, AccessEcon, vol. 6(20), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-04f10009
    as

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    References listed on IDEAS

    as
    1. Katrak, Homi, 1983. "Multinational firms' global strategies, host country indigenisation of ownership and welfare," Journal of Development Economics, Elsevier, vol. 13(3), pages 331-348, December.
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    Citations

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    Cited by:

    1. Dapeng Cai & Yukio Karasawa‐Ohtashiro, 2021. "Why Do Mandated International Joint Ventures Still Exist?," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 236-247, January.
    2. Hiroshi Kurata, 2007. "Foreign equity caps under two types of competition: Bertrand and Cournot," Economics Bulletin, AccessEcon, vol. 6(21), pages 1-11.
    3. repec:ebl:ecbull:v:6:y:2007:i:21:p:1-11 is not listed on IDEAS
    4. Zhong, Litao & Lahiri, Sajal, 2009. "International joint ventures and tax competition in an integrated market," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 38-44, January.
    5. Tai-Liang Chen & Yuanyuan Ma, 2010. "International joint venture, commitment and host-country policy in an integrated market," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(4), pages 411-421, December.

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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