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Firm Ownership and Rent Sharing

  • Monteiro, Natália Pimenta

    ()

    (University of Minho)

  • Portela, Miguel

    ()

    (University of Minho)

  • Straume, Odd Rune

    ()

    (University of Minho)

We analyse – theoretically and empirically – how private versus public ownership of firms affects the degree of rent sharing between firms and their workers. Using a particularly rich linked employer-employee dataset from Portugal, covering a large number of corporate ownership changes across a wide spectrum of economic sectors over more than 20 years, we find a positive relationship between private ownership and rent sharing. Based on our theoretical analysis, this result cannot be explained by private firms being more profit oriented than public ones. However, the result is consistent with privatisation leading to less job security, implying stronger efficiency wage effects.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4909.

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Length: 40 pages
Date of creation: Apr 2010
Date of revision:
Publication status: published in: Journal of Labor Research, 2011, 32 (3), 210 - 236
Handle: RePEc:iza:izadps:dp4909
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