Joint Ventures and Real Options: An Integrated Perspective

• Main Authors: CUYPERS, Ilya, MARTIN, Xavier
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2007
• Subjects: Business; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/1084; https://ink.library.smu.edu.sg/context/lkcsb_research/article/2083/viewcontent/JointVenturesRealOptions_2007.pdf
• Institution: Singapore Management University

We provide a comprehensive synthesis and extension of the real option (RO) literature on joint ventures (JVs), contributing in three main areas. First, we examine major alternative theoretical perspectives on JVs - learning, bargaining, transaction cost and agency theory - to elaborate how they complement or contradict RO predictions. Second, we compare arguments and variables used to explain different JV stages - initial RO explicitness and equity shares, JV stability, and performance consequences - and highlight research opportunities. Third, we discuss and extend research about behavioral aspects of making RO (JV) investments. Overall, we offer new predictions and suggestions for a better integration within the RO literature, and between RO and related literatures on JVs.