By the same authors

Increasing Returns, Knowledge Transfers and the Optimal Duration of Equity Joint Ventures

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DatePublished - 2012
Number of pages22
PublisherDepartment of Economics and Related Studies, University of York
Place of PublicationYork, England
VolumeDiscussion Papers in Economics
Edition12/09
Original languageEnglish

Abstract

Rather than being a random unpredictable event, the break-up of an equity joint venture after a finite time can be modelled as the predictable consequence of underlying economic parameters under conditions of complete certainty. The paper examines the impact of a range of important economic parameters on the optimal duration of an equity joint venture, including the degree of economies of scale and knowledge transfer, and discusses the associated interface with relevant empirical evidence and analysis. It also highlights the policy implications of the analysis for the socially optimal corporate tax rate on the joint venture that aligns the privately optimal duration of the joint venture with its social optimum.

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