Ex-ante efficiency vs ex-post efficiency, negotiation, renegotiation, bargaining powers cooperative game theory 2. Various business formats 2.1. Corporation Reality(berle-Means 1932): large modern corporations tend to have separated ownership and control Separation of management and ownership Separation of income and control rights Economists: ownership and control should be bundled together 2.2. Equity Joint Venture Popular in foreign direct investment Incentive and risk sharing issues Choice for a long-term cooperation? 23 Contractual Joint Venture Popular in the initial stage of foreign direct investment Page 3 of 5Page 3 of 5 • Ex-ante efficiency vs ex-post efficiency, negotiation, renegotiation, bargaining powers, cooperative game theory 2. Various Business Formats 2.1. Corporation • Reality (Berle–Means 1932): large modern corporations tend to have separated ownership and control. • Separation of management and ownership • Separation of income and control rights • Economists: ownership and control should be bundled together. 2.2. Equity Joint Venture • Popular in foreign direct investment • Incentive and risk sharing issues • Choice for a long-term cooperation? 2.3. Contractual Joint Venture • Popular in the initial stage of foreign direct investment