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Book Chapter: Ownership and managerial competition: employee, customer, or outside ownership

TitleOwnership and managerial competition: employee, customer, or outside ownership
Authors
KeywordsOwnership
Competition
Incomplte contracts
Human capital
Issue Date2001
PublisherLondon School of Economics and Political
Citation
Ownership and managerial competition: employee, customer, or outside ownership. In STICERD - Theoretical Economics Paper Series, p. 1-39. UK: London School of Economics and Political, 2001 How to Cite?
AbstractThis paper centres around the question of ownership of firms and managerial competition and how these affect manager and employees' incentives to invest in human capital. We argue that employee's incentives in human capital investment are affected by both ownership and competition since both ownership structure and competition provide bargaining chips to employees. Ownership provides protections which may improve or dull employees' incentives for human capital investment. When there is fierce market competition and no lock-in the allocation of ownership does not play a role (as one might expect), provided that human and physical assets are sufficiently complementary. If asset complementarity is low, ownership matters even in the absence of lock-in. In general, the most efficient ownership arrangement is that which maximizes managerial competition inside the firm.
Persistent Identifierhttp://hdl.handle.net/10722/153483
SSRN

 

DC FieldValueLanguage
dc.contributor.authorBolton, P-
dc.contributor.authorXu, C-
dc.date.accessioned2012-08-06T08:58:12Z-
dc.date.available2012-08-06T08:58:12Z-
dc.date.issued2001-
dc.identifier.citationOwnership and managerial competition: employee, customer, or outside ownership. In STICERD - Theoretical Economics Paper Series, p. 1-39. UK: London School of Economics and Political, 2001-
dc.identifier.urihttp://hdl.handle.net/10722/153483-
dc.description.abstractThis paper centres around the question of ownership of firms and managerial competition and how these affect manager and employees' incentives to invest in human capital. We argue that employee's incentives in human capital investment are affected by both ownership and competition since both ownership structure and competition provide bargaining chips to employees. Ownership provides protections which may improve or dull employees' incentives for human capital investment. When there is fierce market competition and no lock-in the allocation of ownership does not play a role (as one might expect), provided that human and physical assets are sufficiently complementary. If asset complementarity is low, ownership matters even in the absence of lock-in. In general, the most efficient ownership arrangement is that which maximizes managerial competition inside the firm.-
dc.languageeng-
dc.publisherLondon School of Economics and Political-
dc.relation.ispartofSTICERD - Theoretical Economics Paper Series-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectOwnership-
dc.subjectCompetition-
dc.subjectIncomplte contracts-
dc.subjectHuman capital-
dc.titleOwnership and managerial competition: employee, customer, or outside ownershipen_US
dc.typeBook_Chapter-
dc.identifier.emailXu, C: cgxu@hku.hk-
dc.description.naturepublished_or_final_version-
dc.identifier.spage1-
dc.identifier.epage39-
dc.publisher.placeUK-
dc.identifier.ssrn1160978-

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