Partial Ownership and Strategic Alliances with Reallocation of Corporate Resources - 10.1628/093245611796589924 - Mohr Siebeck
Economics

Hiroshi Osano

Partial Ownership and Strategic Alliances with Reallocation of Corporate Resources

Volume 167 () / Issue 2, pp. 202-223 (22)

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This paper considers the role of equity transfer to strategic alliance partners in mitigating the moral-hazard problem that occurs if a participating firm faces some possibility of reallocating a part of the resources devoted to the joint project of the strategic alliance or retreating from the strategic alliance before completing the joint project. I derive a situation in which equity transfer in the strategic alliance is a component of an optimal contract, in particular, in which equity transfer in the strategic alliance is superior to the contract with the cash transfer only. I also analyze optimal equity stake sizes.
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Hiroshi Osano No current data available.