The Role of Knowhow Acquisition in the Formation and Duration of Joint Ventures

Posted: 29 Feb 2008

See all articles by Michel A. Habib

Michel A. Habib

University of Zurich; Swiss Finance Institute

Pierre Mella-Barral

Toulouse Business School

Multiple version iconThere are 2 versions of this paper

Date Written: January 2007

Abstract

We analyze the role of knowhow acquisition in the formation and duration of joint ventures. Two parties become partners in a joint venture to benefit from each other's knowhow. Joint operations provide each party with the opportunity to acquire part of its partner's knowhow. A party's increased knowhow provides the impetus for the dissolution of the joint venture. We characterize the conditions under which dissolution takes place, identify the party that buys out its partner, determine the time to dissolution, establish its comparative statics, and examine the implications of knowledge acquisition for the desirability of joint venture formation. (JEL code: G34)

Suggested Citation

Habib, Michel A. and Mella-Barral, Pierre, The Role of Knowhow Acquisition in the Formation and Duration of Joint Ventures (January 2007). The Review of Financial Studies, Vol. 20, Issue 1, pp. 189-233, 2007, Available at SSRN: https://ssrn.com/abstract=1093506 or http://dx.doi.org/10.1093/rfs/hhl007

Michel A. Habib (Contact Author)

University of Zurich ( email )

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HOME PAGE: http://www.isb.uzh.ch/institut/profs/mhabib.htm

Swiss Finance Institute ( email )

c/o University of Geneva
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CH-1211 Geneva 4
Switzerland

Pierre Mella-Barral

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

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