Firm Ownership and Rent Sharing

40 Pages Posted: 3 May 2010

See all articles by Natália P. Monteiro

Natália P. Monteiro

University of Minho - Economic Policies Research Unit (NIPE)

Miguel Portela

University of Minho; IZA Institute of Labor Economics

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE); CESifo (Center for Economic Studies and Ifo Institute)

Abstract

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.

Keywords: rent sharing, private vs public ownership, panel data

JEL Classification: J45, D21, C23

Suggested Citation

Monteiro, Natália P. and Portela, Miguel and Straume, Odd Rune, Firm Ownership and Rent Sharing. IZA Discussion Paper No. 4909, Available at SSRN: https://ssrn.com/abstract=1599007

Natália P. Monteiro (Contact Author)

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

Miguel Portela

University of Minho ( email )

Braga, 4700
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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