Selling family silver to pay the grocers bill? The case of privatization in India

Gupta Nandini

No 2222, Working Papers from School of International and Public Affairs, Columbia University

Abstract: Using data on Indian government-owned firms, we investigate the effect of privatization on the performance of these firms. Our results suggest that privatization is positively associated with the profitability and efficiency of of government-owned firms. Despite the small number of transactions, selling majority equity stakes to private owners has an economically significant impact on firm performance. Moreover, privatization is not associated with layoffs or a decline in employee compensation. These results are robust to controlling for the observable and unobservable characteristics of firms selected for privatization, and industry and country level reforms.

Keywords: India; privatization; government owned firms; industry reforms (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-10, Revised 2010-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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