Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5058237 | Economics Letters | 2016 | 4 Pages |
Abstract
â¢We show that the popular 51:49 equity structure can be optimal.â¢The 51:49 structure is as efficient as joint control.â¢The key condition: highly asymmetric abilities of the two parties.
As an extension of Wang and Zhu (2005), this short paper shows that the popular 51:49 equity structure can be optimal. This equity structure in joint ventures (JVs) has puzzled economists the world over. We find that, when the two parties are highly asymmetric in their abilities to acquire private benefits from their JV, the 51:49 equity structure is optimal and as efficient as joint control.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Susheng Wang, Tian Zhu,