Compensation Options in Joint Ventures. A Real Options Approach

Juan, Carmen; Olmos, F.; Ashkeboussi, Rahim

doi:10.1080/00137910601159839

Cited by 7 publications

(5 citation statements)

References 14 publications

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“…In this way, as Juan et al (2007) present, the final allocation of profits and losses in a joint venture is possible not in the initial period but only after a certain transition period. (Juan et al 2007) Joint ventures exhibit the following intriguing ownership pattern (Hausbald and Hege 2003): the majority allocates equal or almost equal equity stakes to the parent firms.…”

Section: Institutional Dependencementioning

confidence: 99%

“…(Juan et al 2007) Joint ventures exhibit the following intriguing ownership pattern (Hausbald and Hege 2003): the majority allocates equal or almost equal equity stakes to the parent firms. Large sample data indicates that about two-thirds of two-parent joint ventures have 50%-50% equity allocations, while up to 12% show 50.1% or 51% majority stakes.…”

Section: Institutional Dependencementioning

confidence: 99%

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Overview and Comparison of Profit Sharing in Different Business Collaboration Forms

Stein

Ginevičius

2010

Journal of Business Economics and Management

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Abstract. Growing international business has brought a variety of collaborative business structures. In the paper the problem of profit sharing is analyzed for diverse business collaboration forms. It is the purpose to give an overview of the main influence factors of profit sharing. The overview is limited to the most common collaboration forms: multinational company, franchise system, joint venture and cluster. It is shown that the factors that mostly influence the profit sharing are the input balance of every member, which is expressed as the aggregate of profit (financial benefit) and the technology (intangible benefit). Finally, the different business collaboration forms are compared.

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Section: Institutional Dependencementioning

confidence: 99%

Section: Institutional Dependencementioning

confidence: 99%

Overview and Comparison of Profit Sharing in Different Business Collaboration Forms

Stein

Ginevičius

2010

Journal of Business Economics and Management

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“…Compensation clauses are often used in equity joint ventures for regulating transition periods of allocation of profits and losses (Juan et al , 2006, 2007). The two distinguishing features of the proposed compensation clause are the following: Public partner commits on subsidizing an agreed percentage of losses experienced by the OS while stating a ceiling for public contributions.…”

Section: Description Of the Clausesmentioning

confidence: 99%

Public–private equity joint ventures and risk transfers in motorways of the sea

Juan

Olmos

2019

BEPAM

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Purpose The purpose of this paper is to present a new scheme of public–private partnership (PPP) within the framework of motorways of the sea (MoS) similar to that of an equity joint venture along with a methodology for valuing risk transfers arising from options embedded in the clauses included in such agreement. Design/methodology/approach The architecture of the proposed PPP is an adaptation to the scope of a MoS of collaborative schemes commonly used in industry such as equity joint ventures. The methodology for valuing options involved making use of a valuation tree of optimal cashflows along with algorithm designs from the field of financial and real options. Findings The proposed structure of public–private equity joint venture (PPEJV) increases the stability of private–public collaboration as compared with standard PPPs, so as to achieve the desired modal shift. The analyzed case study shows how the methodology provides valuable numerical information for both negotiating partners and policy makers. Practical implications This study provides a quantitative tool for policy makers to redefine the role that public agents and public funds should play in a future sustainable mobility model. Originality/value The originality of the authors’ contribution to the field of PPPs in transport is triple. First, there is no precedent in the literature on PPPs of an architecture similar to that of the proposed PPEJV. Second, unlike the usual practice in the valuation of financial or real options, no prior structure is assumed for modelling the behaviour of cashflows. Third, the type of options addressed is not usual neither in the real options literature in general nor in the valuation of guarantee mechanisms included in PPPs in particular.

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“…The architecture of the compensation clause developed in this section is based on the so-called clauses of dynamic reallocation included in joint venture agreements and strategic alliances (21,22). For literature concerning this topic in other concessional areas, see Brown (4), Vassallo and Gallego (8), and Vassallo and Sánchez (23).…”

Section: Dynamic Compensation Clausesmentioning

confidence: 99%

Private–Public Partnerships as Strategic Alliances

Juan

Olmos

Ashkeboussi

2008

Transportation Research Record

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A new approach to the design of concession contracts of port infrastructures that adapts some of the methods used in the design and start-up of strategic alliances is presented. From a cost–benefit analysis of the project, based on the industry benchmarks, a revenue-sharing model dependent on the investment interest and the risk undertaken or transferred by each partner was formulated. This model aids in the calculation of the amount of the canons (lease and royalty charges) that should be stated in the contract. Also, to avoid complicated renegotiations and undesired deadlock situations, methods are presented for the dynamic actualization of such canons according to changes that might occur during the concession life. Finally, in those situations in which, for welfare policy reasons, the public partner wants to minimize the risk of a failure of the concession, dynamic mechanisms have been developed that allow the public authority to offer the private partner partial insurance against losses based on a recovery mechanism of the subsidized amounts.

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Compensation Options in Joint Ventures. A Real Options Approach

Cited by 7 publications

References 14 publications

Overview and Comparison of Profit Sharing in Different Business Collaboration Forms

Overview and Comparison of Profit Sharing in Different Business Collaboration Forms

Public–private equity joint ventures and risk transfers in motorways of the sea

Private–Public Partnerships as Strategic Alliances

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