Joint Ventures and Real Options: An Integrated Perspective

Abstract

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.

Citation

Cuypers, I.R.P. and Martin, X. (2007), "Joint Ventures and Real Options: An Integrated Perspective", Reuer, J.J. and Tong, T.W. (Ed.) Real Options Theory (Advances in Strategic Management, Vol. 24), Emerald Group Publishing Limited, Leeds, pp. 103-144. https://doi.org/10.1016/S0742-3322(07)24004-5