A contractual analysis of state versus private ownership

Kun Jiang and Susheng Wang

China Economic Review, 2017, vol. 43, issue C, 142-168

Abstract: We uniquely analyze the advantages and disadvantages of private ownership versus state ownership under various circumstances by focusing on three aspects: external risk, internal governance, and relative importance of owners versus managers. Our theoretical analysis indicates that private ownership is better than state ownership if the business environment is risky, corruption is limited, or the manager plays a more important role than the owner. Our empirical analysis supports our theoretical findings and reveals that better internal governance, more external risk and greater importance of the manager will magnify the benefits of privatization.

Keywords: Contractual analysis; State ownership; Private ownership; Incentives; External risks; Internal corruption (search for similar items in EconPapers)
JEL-codes: D23 D73 P31 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:43:y:2017:i:c:p:142-168

DOI: 10.1016/j.chieco.2017.01.011

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