Agency cost and the crisis of China's SOEs

摘要

This paper compares and contrasts our earlier principal-agent analysis of Chinese state-owned enterprises (SOEs) with that of Zhou and Wang (China Econ. Rev. 11(2000) 297.). We argue that the focal principal-agent relationship in these SOEs consists of the manager as the principal and the workers as the agents. In addition, the paper addresses the appropriate representation of the state as principal and the manager as agent when the two top levels of SOEs are the focus. The modeling of collusion in a multilevel organization is also discussed. Other aspects in representing these SOEs are presented.