Insecure Property Rights And Government Ownership Of Firms
We develop a theory of the ownership of firms in an environment without secure property rights against state encroachment. "Private ownership" leads to excessive revenue hiding, and "state ownership" (i.e., national government ownership) fails to provide incentives for managers and local governments in a credible way. Because "local government ownership" integrates local government activities and business activities, local government may better serve the interests of the national government, and thus local government ownership may credibly limit state predation, increase local public goods provision, and reduce costly revenue hiding. We use our theory to interpret the relative success of local governmen-towned firms during China's transition to a market economy. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Year of publication: |
1998
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Authors: | Che, Jiahua ; Qian, Yingyi |
Published in: |
The Quarterly Journal of Economics. - MIT Press. - Vol. 113.1998, 2, p. 467-496
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Publisher: |
MIT Press |
Saved in:
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