Abstract

http://ssrn.com/abstract=2217627
 
 

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In Strange Company: The Puzzle of Private Investment in State-Controlled Firms


Mariana Pargendler


São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP; Stanford Law School

Aldo Musacchio


Brandeis University- International Business School; Harvard Business School - Business, Government and the International Economy Unit; National Bureau of Economic Research

Sérgio G. Lazzarini


Insper Institute of Education and Research

February 14, 2013

Harvard Business School BGIE Unit Working Paper No. 13-071

Abstract:     
A large legal and economic literature describes how state-owned enterprises (SOEs) suffer from a variety of agency and political problems. Less theory and evidence, however, have been generated about the reasons why state-owned enterprises listed in stock markets manage to attract investors to buy their shares (and bonds). In this Article, we examine this apparent puzzle and develop a theory of how legal and extralegal constraints allow mixed enterprises to solve some of these problems. We then use three detailed case studies of state-owned oil companies – Brazil’s Petrobras, Norway’s Statoil, and Mexico’s Pemex – to examine how our theory fares in practice. Overall, we show how mixed enterprises have made progress to solve some of their agency problems, even as government intervention persists as the biggest threat to private minority shareholders in these firms.

Number of Pages in PDF File: 39

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Date posted: February 14, 2013  

Suggested Citation

Pargendler, Mariana and Musacchio, Aldo and Lazzarini, Sérgio G., In Strange Company: The Puzzle of Private Investment in State-Controlled Firms (February 14, 2013). Harvard Business School BGIE Unit Working Paper No. 13-071. Available at SSRN: http://ssrn.com/abstract=2217627 or http://dx.doi.org/10.2139/ssrn.2217627

Contact Information

Mariana Pargendler
São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP ( email )
R. Rocha, 233, Bela Vista
São Paulo, 01330-000
Brazil

Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Aldo Musacchio (Contact Author)
Brandeis University- International Business School ( email )
Mailstop 32
Waltham, MA 02454-9110
United States
Harvard Business School - Business, Government and the International Economy Unit ( email )
Soldiers Field Road
Boston, MA 02163
United States
HOME PAGE: http://www.people.hbs.edu/amusacchio/
National Bureau of Economic Research ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://www.nber.org/people/aldo_musacchio
Sérgio Giovanetti Lazzarini
Insper Institute of Education and Research ( email )
R Quata 300
Sao Paulo, 04542-030
Brazil
55-11-45042387 (Phone)
HOME PAGE: http://www.sergiolazzarini.insper.edu.br/indexelazza.html
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