During regulation the regulator carries out an intermediary role between shareholders and managers, consequently affecting property rights and the agency relation between the two. Deregulation implies that this intermediary role ceases to exist. This article analyses how government deregulation changes property rights, differentiating between firms of network and non-network structures. Changes in property rights affect the agency relation between shareholders and managers, increasing information asymmetry and agency costs. I argue that the way to reduce agency costs depend to a great extent on the country's legal system classified as of common or civil law tradition. © 2008 Springer Science+Business Media, LLC.