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Political Control and Managerial Survival in State-Owned Enterprises

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Abstract

This article explores the impact of political determinants on the survival of managers in state-owned enterprises (SOEs). Drawing on theories of bureaucratic delegation, it is argued that preference divergence between principals and agents as well as among principals is a major driver of managerial turnover. More specifically, the partisan affiliation of SOE-managers with the government, the opposition, or individual ministers can serve to explain the length of their tenure. The analysis employs Cox proportional hazard regressions to test these hypotheses on an original data set of 1,671 managers serving in 87 public corporations in Austria between 1995 and 2010, thus presenting one of the first large-n analyses of political appointments in a parliamentary system. The results strongly support the proposition that partisan affiliation drives managerial survival.

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