EconPapers    
Economics at your fingertips  
 

Privatization, corporate control and regulatory reform: the case of Telefonica

Germà Bel () and Francesc Trillas

Telecommunications Policy, 2005, vol. 29, issue 1, 25-51

Abstract: This study analyzes the interaction of agency problems in public policy and of agency problems inside the firm: it investigates the case of a large privatized firm subject to many policy constraints. The last steps of Telefonica's privatization were designed to promote a dispersed ownership and give managers a high level of discretion in running the company. This effectively created an agency problem inside the firm. There were no powerful shareholders to constrain the managers, and the threat of a takeover was not a credible one, since the government kept a golden share. There is no overall evidence of capture of politicians and regulators by managers in the interest of shareholders, although evidence suggests the existence of collusion between politicians and managers. The authors interpret the political interference with the firm's control (a well-documented phenomenon both in this study and in the cross-country literature on privatization; e.g. political ends in privatization, influence in appointments, golden shares) as the most visible part of such collusion. Liberalization and multi-level regulation will likely make any type of collusion or capture more difficult in the future.

Keywords: Corporate; governance; Privatization; Regulation; Deregulation; Capture (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (15) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0308596104000825
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Privatization, Corporate Control and Regulatory Reform: The case of Telefonica (2004) Downloads
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:eee:telpol:v:29:y:2005:i:1:p:25-51

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
http://www.elsevier. ... /30471/bibliographic

Access Statistics for this article

Telecommunications Policy is currently edited by Erik Bohlin

More articles in Telecommunications Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2020-01-06
Handle: RePEc:eee:telpol:v:29:y:2005:i:1:p:25-51