Program
Subjects
Works
Book Types
Back to issue
Cover of: Partial Ownership and Strategic Alliances with Reallocation of Corporate Resources
Hiroshi Osano

Partial Ownership and Strategic Alliances with Reallocation of Corporate Resources

Section: Article
Volume 167 (2011) / Issue 2, pp. 202-223 (22)
Published 09.07.2018
DOI 10.1628/093245611796589924
  • article PDF
  • available
  • 10.1628/093245611796589924
Due to a system change, access problems and other issues may occur. We are working with urgency on a solution. We apologise for any inconvenience.
Summary
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.