The paper examines the microeconomic (partial equilibrium) behavior of joint ventures established between transnational corporations and domestic partners in less developed countries. It focuses on issues relating to resource allocation and profit distribution under various institutional scenarios. The analysis places special emphasis on the role of bargaining power, transfer pricing, stock ownership, and profit shares of the parties, and the responsiveness of joint ventures to national development goals. Some of the results apply to wholly owned subsidiaries of transnational corporations, local firms, and licensing arrangements, which emerge as special cases.

Many development programs that attempt to disseminate improved technologies are limited in duration because of external funding constraints or an assumption of impact sustainability, but there is limited evidence on whether and when terminating such programs is efficient. We provide novel experimental evidence on the impacts of a randomized phaseout of an agricultural extension and subsidy program that promotes improved inputs and cultivation practices among smallholder women farmers in Uganda. We find that phaseout does not diminish the use of either practices or inputs as farmers shift purchases from NGO-sponsored village-based supply networks to market sources. These results indicate that short-term interventions can suffice to trigger persistent effects, consistent with models of technology adoption that emphasize learning from experience.