Thumbnail Image
Item

Competition Reduces X-Inefficiency: A Note on a Limited Liability Mechanism

Stennek,M.J.
Abstract
The study illustrates that a financial restriction may serve as a disciplining device on the internal efficiency of a firm, and that the disciplining power is higher the tougher the product market competition is. The financial restriction is modeled as a limited liability constraint, that is a non-negative profit constraint. Hence, this limited liability mechanism may, in part, account for the disciplining power of product market competition on firm efficiency, alleged by policy makers as well as economists.
Description
Date
1995
Journal Title
Journal ISSN
Volume Title
Publisher
CentER
Collections
Tilburg University Research Output Collection
Show all metadata
Files
Thumbnail Image
56.pdf
Adobe PDF, 279.73 KB
Research Projects
Organizational Units
Journal Issue
Keywords
Citation
Stennek, M J 1995 'Competition Reduces X-Inefficiency : A Note on a Limited Liability Mechanism' CentER Discussion Paper, vol. 1995-56, CentER.
URI
https://hdl.handle.net/20.500.14602/26252
Embedded videos