We develop a model in which multinational investors decide about the modes of organization, the locations of production, and the markets to be served. Foreign investments are driven by market-seeking and cost-reducing motives. We further assume that investors face costs of control that vary...

This paper examines the role of contracting institutions on a multinational firm's optimal ownership strategy. We develop a model in which both a multinational firm and its local joint venture partner can ex post engage in costly rent-seeking actions to increase their ex ante agreed upon revenue...

We study the effects of changes in organizational form on firm performance and management turnover. Our analysis sheds light on whether there are gains to be exploited by transitioning from product market relationships such as joint ventures to wholly owned subsidiaries through mergers and...

We analyze the control and performance of assets operating in joint ventures (JVs). Control in JVs is determined by the allocation of voting rights and by the contracts that govern the JVs. This hybrid allocation of control is aimed to ameliorate the potential for ex-post opportunism. An equal...

The present paper argues that the effect of corruption on foreign ownership is not necessarily linear and depends on the level of host corruption. So long as the expected returns from foreign investments exceed its expected costs, higher host corruption will be associated with higher foreign...

We illustrate the properties of a competitive joint venture (CJV) institution as an alternative to traditional natural monopoly regulation of the distribution wires portion of the electricity supply chain. This CJV institution consists of an endogeneous ownership rule and a wires access charge...

We show that joint ownership (partnership or joint venture) can implement first best in a twice-repeated game when each agent believes that the other party is honest with a very small probability. In the final period the ownership structure is renegotiated because joint ownership is ex post...

This paper studies the role of contested ownership in a situation where two players have to make a transaction-specific investment and when contracts are incomplete. It compares contested ownership to the various ex ante ownership structures typically discussed in the literature (following the...

The decision to cooperate within R&D joint ventures is often based on `expert advice.' Such advice typically originates in a due diligence process, which assesses the R&D joint venture's profitability, for example, by appraising the achievability of synergies. We show that if the experts who...