How Much Are the Property Rights?

This article presents the answer to this question by comparing the value of a common firm with the value of hypothetical firm at no property rights environment. For this purpose, a dynamic equilibrium model of firm valuation in case of insecure property rights environment is created. This required the redefinition of the firm's objective function by excluding the invested capital from the factors affecting the value, because of expropriation risk. The conclusion was made that under current economic conditions, the value of the firm ownership rights can be estimated as more than 95% of its total value