Ownership structure and efficiency: an analysis with the Theory of Incentives
Abstract
This article discusses the influence of the ownership structure over the efficiency.
The framework used is the incentive theory, in which the principal must build an incentive
scheme, which induces an agent to act optimally. First, we verify the reasons for public
intervention in industries with market failure. Following, we study the deterioration of the
incentive structure over managers as a result of the ownership change. So, we verify how the
structure of incentives can be restored with the firm’s privatization, with the maintenance,
by the government, of some control over the firm. Finally, we make a brief exposition about
the regulatory instruments.
JEL Classification: D42; D43; D12; L13.
Keywords: Privatization theory of incentives principal-agent model market failures property