Foreign equity caps for international joint ventures

Yasunobu Tomoda () and Hiroshi Kurata ()
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Yasunobu Tomoda: Graduate School of Economics and Business Administration, Hokkaido University
Hiroshi Kurata: Graduate School of Economics and Business Administration, Hokkaido University

Economics Bulletin, 2004, vol. 6, issue 20, 1-9

Abstract: We analyze foreign equity caps for international joint ventures. We develop a partial equilibrium model in which foreign equity caps are determined endogenously and find an interesting property, named a welfare indifference property i.e., maximization of domestic welfare and that of world welfare are indifferent for the host government. This property also implies that the government is indifferent to the distribution of a JV's profit.

JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 2004-10-27
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Citations: View citations in EconPapers (5)

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