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Shared Ownership in the International Make or Buy Dilemma

Author

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  • Charlie Joyez

    (Université Côte d'Azur, France
    GREDEG CNRS)

Abstract

The traditional Grossman-Hart-Moore Property Right Theory of the firm and subsequent works do not consider shared ownership as an optimal solution because of the incentives losses it would carry. This paper provides an extension of Antràs & Helpman (2008) international integration dilemma under partially incomplete contracts to joint-ventures (JVs), and identifies several cases where JVs are optimal for foreign investors.The model insists on the interaction between firm-level and country-level parameters, with higher productivity giving increasing access to higher control in countries with stronger contractual enforceability, consistent with empirical observations. Potential heterogeneous spillovers effects can be deduced from this framework.

Suggested Citation

  • Charlie Joyez, 2019. "Shared Ownership in the International Make or Buy Dilemma," GREDEG Working Papers 2019-04, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2019-04
    as

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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2019-04.pdf
    File Function: First version, 2019
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    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. repec:hal:pseose:hal-00860203 is not listed on IDEAS
    3. Mutinelli, Marco & Piscitello, Lucia, 1998. "The Influence of Firm's Size and International Experience on the Ownership Structure of Italian FDI in Manufacturing," Small Business Economics, Springer, vol. 11(1), pages 43-56, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Property Right Theory; International Joint Ventures; Contracting Institutions; Firms Heterogeneity; Multinational Enterprises;
    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
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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