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Firm ownership and rent sharing

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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File URL: http://www3.eeg.uminho.pt/economia/nipe/docs/2010/NIPE_WP_13_2010.PDF
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Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 13/2010.

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Date of creation: 2010
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Handle: RePEc:nip:nipewp:13/2010
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Núcleo de Investigação em Políticas Económicas, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal

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  17. Klaus M. Schmidt, 1995. "Incomplete Contracts and Privatization," Discussion Paper Serie A 480, University of Bonn, Germany.
  18. Mumford, Karen & Dowrick, Steve, 1994. "Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 329-36, May.
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  31. Junichiro Ishida & Noriaki Matsushima, 2006. "Should civil servants be restricted in wage bargaining? A mixed-duopoly approach," Discussion Papers 2006-07, Kobe University, Graduate School of Business Administration.
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