Privatization and Restructuring : An Incomplete-Contract Approach /

Since an enterprise, which is to be privatized, has to be restructured in uncertainty, and the restructuring investments are sunk when the final decision on the sale price is taken, there is an imminent danger that restructuring is not efficient, and there is underinvestment. We consider, restructur...

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Autore principale: Bos, Dieter
Natura: Periodico
Lingua:English
Pubblicazione: Washington, D.C. : International Monetary Fund, 1996.
Serie:IMF Working Papers; Working Paper ; No. 1996/101
Soggetti:
Accesso online:Full text available on IMF
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Riassunto:Since an enterprise, which is to be privatized, has to be restructured in uncertainty, and the restructuring investments are sunk when the final decision on the sale price is taken, there is an imminent danger that restructuring is not efficient, and there is underinvestment. We consider, restructuring by the private buyer of the firm, by a government privatization agency, and by both. In the first two cases-one-sided restructuring-a first best can be achieved. In the case of both-sided restructuring, however, the first best cannot be reached if both parties engage in restructuring after signing the contract.
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Descrizione fisica:1 online resource (20 pages)
Natura:Mode of access: Internet
ISSN:1018-5941
Accesso:Electronic access restricted to authorized BRAC University faculty, staff and students