Empirical evidence of the value of monitoring in joint ownership

Mantecon, Tomas; Liu, Ian; Gao, Fei

doi:10.1016/j.jbankfin.2011.10.019

“…On one hand, Killing(1983) finds that satisfactory performance is more prevalent in joint ventures with a dominant ownership. On the other hand,Mantecon et al (2012) suggest that JV generate larger returns when ownership is shared equally. Moreover, bond abnormal returns should be influenced by firm and bond characteristics.…”

mentioning

confidence: 99%

Do joint ventures and strategic alliances create value for bondholders?

Chen

¹

,

King

²

,

Wen

³

2015

Journal of Banking & Finance

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“…Williamson (1983) proposes that assets contributed to JVs act as hostages fostering cross-monitoring among partners. Consistent with this argument, Mantecon, Liu, and Gao (2012) find evidence that monitoring reduces hubris or agency problems in the acquisition of corporate assets by JVs. Robinson (2008) proposes that shared ownership in alliances helps overcome incentive problems inside firms.…”

Section: B Prior Literature On the Control And Performance Of Jvsmentioning

confidence: 66%

The Control and Performance of Joint Ventures

Mantecon

¹

,

Song

²

,

Luo

³

2013

Self Cite

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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 seeks to reduce the potential for ex post opportunism. The results suggest that contractual provisions encourage collaboration and improve JV performance when one of the partners accepts a minority position on the board. The analysis also reveals that with the exception of JVs with contractual option provisions, assets operating in our sample of JVs generate higher returns than assets in fully controlled subsidiaries.

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“…Williamson () proposes that assets contributed to JVs act as hostages fostering cross‐monitoring among partners. Consistent with this argument, Mantecon, Liu, and Gao () find evidence that monitoring reduces hubris or agency problems in the acquisition of corporate assets by JVs. Robinson () proposes that shared ownership in alliances helps overcome incentive problems inside firms.…”

Section: Literature Reviewmentioning

confidence: 83%

The Control and Performance of Joint Ventures

Mantecon¹,

Song²,

Luo

³

2015

Financial Management

Self Cite

View full text Add to dashboard Cite

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 seeks to reduce the potential for ex post opportunism. The results suggest that contractual provisions encourage collaboration and improve JV performance when one of the partners accepts a minority position on the board. The analysis also reveals that with the exception of JVs with contractual option provisions, assets operating in our sample of JVs generate higher returns than assets in fully controlled subsidiaries.

show abstract

Empirical evidence of the value of monitoring in joint ownership

Cited by 8 publications

References 52 publications

Do joint ventures and strategic alliances create value for bondholders?

Do joint ventures and strategic alliances create value for bondholders?

The Control and Performance of Joint Ventures

The Control and Performance of Joint Ventures

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