FOREIGN INVESTOR PARTICIPATION IN PRIVATIZATIONS: DOES THE INSTITUTIONAL ENVIRONMENT MATTER?

Narjess Boubakri, Jean‐Claude Cosset, Omrane Guedhami and Mohammed Omran

Journal of Financial Research, 2007, vol. 30, issue 1, 129-146

Abstract: We examine the determinants of foreign investors' participation in the privatization process of developing countries. First, we estimate the probability that foreign investors target privatized firms in a given country. We show that a favorable legal environment where investor protection is higher enhances foreign investors' participation. Foreigners also prefer large, strategic firms from high‐growth economies and socially stable countries with low political risk. Second, we restrict our analysis to privatized firms that foreign investors actually choose and show that the stakes foreigners hold are larger if the firms are privatized by private sales as opposed to public offerings.

Date: 2007
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Citations: View citations in EconPapers (11)

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https://doi.org/10.1111/j.1475-6803.2007.00206.x

Related works:
Working Paper: Foreign Investor Participation in Privatizations: does the Institutional Environment Matter? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfnres:v:30:y:2007:i:1:p:129-146

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