Where does privatization work? Understanding the heterogeneity in estimated firm performance effects

J. David Brown, John Earle and Almos Telegdy

Journal of Corporate Finance, 2016, vol. 41, issue C, 329-362

Abstract: Why do the reported effects of privatization on firm performance vary so much? This paper provides new estimates of these effects and tests potential explanations for heterogeneity using comprehensive, long-panel data for 70,000 firms in five East European economies. We estimate that privatization raises measures of profitability, productivity, and growth by about 5–12% on average, but with substantial variation across countries and time periods. Analyzing heterogeneity in privatization effectiveness, we find little systematic role for firm size, financial dependence, exchange listing, or technological complexity, but important variation by fraction privatized, ownership concentration, firm quality, and the macroeconomic and institutional environment.

Keywords: Privatization methods; Corporate governance; Ownership structure; Business environment; Firm performance (search for similar items in EconPapers)
JEL-codes: G32 G34 L25 L33 P31 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:41:y:2016:i:c:p:329-362

DOI: 10.1016/j.jcorpfin.2016.10.001

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