In 2012, the Argentinian government nationalized YPF, which is a subsidiary of Repsol, the Spanish oil giant. YPF was integral to the operations of Repsol. The firm was set up 10 years earlier, and had received more than €20 billion of capital investment from Repsol. The benefits to Repsol’s shareholders from YPF were large and every year,

$600 million of dividends were paid to the parent company. How do you think the presence of a major state shareholder (the Argentinian government) will change the agency relationships within YPF? Explain.