Bargaining, bonding, and partial ownership

Dasgupta, Sudipto (2000) Bargaining, bonding, and partial ownership. International Economic Review, 41 (3). pp. 609-635. ISSN 0020-6598

Full text not available from this repository.

Abstract

This article provides a theory of interfirm partial ownership. We consider a setting in which an upstream firm can make two alternative types of invest- ment: either specific investment that only a particular downstream firm can use or general investment that any downstream firm is capable of using. When the benefits from specific and general investments are both stochastic, equity partic-ipation by the downstream firm in the upstream firm can lead to more efficient outcomes than take-or-pay contracts. The optimal ownership stake of the down-stream firm is less than 50 percent under a natural assumption about relative bargaining power.

Item Type:
Journal Article
Journal or Publication Title:
International Economic Review
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/2000/2002
Subjects:
ID Code:
74565
Deposited By:
Deposited On:
07 Jul 2015 12:36
Refereed?:
Yes
Published?:
Published
Last Modified:
01 Jan 2020 09:17