The impacts of economic importance difference of a joint venture (JV) held by partners and partners' size difference on the extraction of rivalrous and non-rivalrous private benefits in a JV

Zhang, Xiaoxiang and Wen, Jie (2016) The impacts of economic importance difference of a joint venture (JV) held by partners and partners' size difference on the extraction of rivalrous and non-rivalrous private benefits in a JV. International Review of Financial Analysis. ISSN 1057-5219

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Abstract

We investigate the impacts of economic importance difference of a JV held by partners and partners' size difference on the extraction of rivalrous and non-rivalrous private benefits in a JV. Focusing on 824 JV events during the period 2001–2012 in the global markets we find that, where the economic importance difference of a JV held by partners is large, a partner with a more economically important JV extracts more rivalrous type and non-rivalrous type of private benefits. Under the situation where partners' size difference is large, a smaller partner extracts more non-rivalrous type of private benefits. Whether arbitrage trading between two partners' shares outperforms the trading strategy of buy-hold two partners' shares during the JV announcement period depends on whether there are large private benefits available or not.

Item Type: Article
Keywords: Joint venture, Private benefit, Event study, Trading strategies
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HG Finance > HG4001 Finance management. Business finance. Corporation finance
H Social Sciences > HG Finance > HG4501 Investment, capital formation, speculation
Depositing User: Xiaoxiang Zhang
Date Deposited: 16 Sep 2016 13:24
Last Modified: 07 Mar 2017 00:57
URI: http://sro.sussex.ac.uk/id/eprint/63375

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