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A contractual analysis of state versus private ownership

Jiang, Kun; Wang, Susheng

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Kun Jiang

Susheng Wang


We uniquely analyze the advantages and disadvantages of private ownership versus state ownership under various circumstances by focusing on three aspects: external risk, internal governance, and relative importance of owners versus managers. Our theoretical analysis indicates that private ownership is better than state ownership if the business environment is risky, corruption is limited, or the manager plays a more important role than the owner. Our empirical analysis supports our theoretical findings and reveals that better internal governance, more external risk and greater importance of the manager will magnify the benefits of privatization.


Jiang, K., & Wang, S. (2017). A contractual analysis of state versus private ownership. China Economic Review, 43,

Journal Article Type Article
Acceptance Date Jan 21, 2017
Online Publication Date Jan 25, 2017
Publication Date Apr 30, 2017
Deposit Date Feb 27, 2018
Publicly Available Date Feb 27, 2018
Journal China Economic Review
Print ISSN 1043-951X
Electronic ISSN 1043-951X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 43
Keywords Contractual analysis; State ownership; Private ownership; Incentives; External risks; Internal corruption
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