OWNERSHIP AND THE NATURE OF THE FIRM

This paper looks at the institution of the ownership of firms from a theoretical and comparative standpoint. The joining of control, utilization, and alienation rights and the practical association of ownership with financing and risk-bearing roles are considered. Variations in ownership concentration, in the level of inside ownership, and in owner versus nonowner finance are explained with reference to capitalization requirements, agency costs, diversification motives, and asset specificity. The agency cost of separating ownership from work, the rationales and ownership dimensions of public and nonprofit providers, and the agency costs of public ownership are also discussed. © 1993 Academic Press, Inc.