Privatization, corporate control and regulatory reform: the case of Telefonica
Germà Bel () and
Telecommunications Policy, 2005, vol. 29, issue 1, 25-51
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)
References: Add references at CitEc
Citations: View citations in EconPapers (15) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Privatization, Corporate Control and Regulatory Reform: The case of Telefonica (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
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. ... /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 ().