Abstract
We examine POSCO's success based on the internal and external managerial incentive structure. By internal incentive, we mean institutional foundation under which the interaction between the principal (the government) and the agents (the managers) takes place. This involves examining the political economy of state intervention and how the state employed credible policies intended to end 'politicized' relationship with state-owned enterprises (SOEs). Extrnal incentive structure relates to various exogenous market forces that discipline managers and owners in terms of corporate performance. Combined, they determine the extent to which SOEs face 'hardened budget constraints' and in the case of POSCO, the state was able to enforce credible policies that hardened the budget constraint.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
