Contracting to (Dis)incentivize? An Integrative Transaction‐Cost Approach on How Contracts Govern Specific Investments

2022 ◽  
Author(s):  
Desmond (Ho‐Fu) Lo ◽  
Giorgio Zanarone ◽  
Mrinal Ghosh
Keyword(s):  
Transaction Cost ◽  
Cost Approach ◽  
Specific Investments

scholarly journals Share Contract Revisited: A New Transaction Cost Approach

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Jian Ding ◽  
Yixiao Zhou
Keyword(s):  
Hong Kong ◽  
Transaction Cost ◽  
Empirical Studies ◽  
Theoretical Explanation ◽  
Empirical Testing ◽  
Cost Approach ◽  
Satisfactory Answer ◽  
The Impact

Abstract The purpose of this paper is to explore how sharecropping contracts are chosen over fixed-rent contracts. There are two concerning issues. First, theoretical explanation has been criticized for not providing a satisfactory answer to the question as to why share contracts are chosen. Second, among the existing empirical studies, there are great controversies about the impact of variance of output. Inspired by the latest insights from (Cheung, S. N. S. 2014. Economic Explanation. Hong Kong: Arcadia Press.), this paper not only provides an explanation for the choice of share contract that is suitable for empirical testing, but also solves the puzzle over variance of output.

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