Inside versus outside ownership: a political theory of the firm

Holger M. Müller () and Karl Wärneryd
Additional contact information
Holger M. Müller: New York University and CEPR

A chapter in 40 Years of Research on Rent Seeking 2, 2001, pp 679-693 from Springer

Abstract: Abstract If contracting within the firm is incomplete, managers will expend resources on trying to appropriate a share of the surplus that is generated. We show that outside ownership may alleviate the deadweight losses associated with such costly distributional conflict, even if all it does is add another level of conflict. In case managers have to be provided with incentives to make firm- specific investments, there is a tradeoff between minimizing conflict costs and maximizing output. This suggests, among other things, an explanation of why some firms are organized as partnerships and others as stock corporations.

Date: 2001
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Inside versus Outside Ownership: A Political Theory of the Firm (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-79247-5_41

Ordering information: This item can be ordered from
http://www.springer.com/9783540792475

DOI: 10.1007/978-3-540-79247-5_41

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().