Details

Autor(en) / Beteiligte

• Fan, Joseph P. H.
• Wong, T. J.
• Zhang, Tianyu

Titel

Institutions and Organizational Structure: The Case of State-Owned Corporate Pyramids

Ist Teil von

• Journal of law, economics, & organization, 2013-12, Vol.29 (6), p.1217-1252

Ort / Verlag

Oxford: Oxford University Press

Erscheinungsjahr

2013

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• Pyramidal organizational structures are common throughout the world. This article considers an explanation for pyramids built by the state: separating firms from political interference. Although intermediate pyramidal layers insulate managers from a pyramid's top owners and hence induce agency costs, they also minimize political costs of state intervention. All else equal, the optimal division of power between the government and the managers should be the point at which the marginal agency costs are equal to the marginal political costs. Our empirical results, based on hand-collected data for 742 local government-owned Chinese business groups are generally in line with this hypothesis.