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On lemons and indigestibility: resource assembly through joint ventures
Author(s) -
Reuer Jeffrey J.,
Koza Mitchell P.
Publication year - 2000
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(200002)21:2<195::aid-smj79>3.0.co;2-7
Subject(s) - transaction cost , valuation (finance) , ex ante , industrial organization , joint (building) , resource (disambiguation) , database transaction , economics , business , information asymmetry , microeconomics , joint venture , commerce , computer science , finance , architectural engineering , computer network , programming language , macroeconomics , engineering
We revisit the relationship between two theoretical perspectives on joint ventures—the asymmetric information view and the indigestibility view. The former emphasizes the ex ante valuation challenges firms confront in combining resources, while the latter attends to ex post transaction costs arising from the extraction and integration of indivisible resources. We argue that these two views are complementary, rather than competing, in explaining the usefulness of joint ventures. We also suggest that the perspectives are overlapping inasmuch as resource indivisibility contributes to asymmetric information. Copyright © 2000 John Wiley & Sons, Ltd.