Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101489
Authors: 
Broll, Udo
Marjit, Sugata
Year of Publication: 
1992
Series/Report no.: 
Diskussionsbeiträge: Serie II, Sonderforschungsbereich 178 "Internationalisierung der Wirtschaft", Universität Konstanz 183
Abstract: 
International joint ventures (JV) are popular institutional forms chosen by the less developed countries (LDCs) to attract foreign Investments. In this paper we describe a set up where a multinational firm (MNF) decides on the volume of investment and the LDC gov-ernment offers a package specifying taxes and sharing rules by a JV contract. Such sharing rules can be designed to enhance the level of optimal investment under the presence of distortions and asymmetric information. We also provide an example where a JV contract might not work. In general, JV contracts lead to efficient outcomes.
Document Type: 
Working Paper

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