EconPapers    
Economics at your fingertips  
 

The constraints on full privatization: International evidence

Narjess Boubakri, Jean-Claude Cosset and Walid Saffar

Journal of Corporate Finance, 2017, vol. 42, issue C, 392-407

Abstract: Using a cross-country sample of 406 non-financial firms in 44 countries, we examine, based on firm and country level data, the decisions of governments to resort to gradual, staggered sales that result in full privatization. We report that 168 firms over the 1995–2009 period were fully privatized. It takes seven years on average for a government to completely privatize an SOE. Using the Cox proportional hazard model, we find that full privatization is a slower process in collectivist societies and when political constraints and employment protection laws are more stringent. Finally, we document a positive effect of full privatization on firm outcomes (namely, risk-taking, efficiency, profitability, and growth), supporting previous theoretical and empirical arguments that full relinquishment of control and ownership is required in order to change firms’ objectives.

Keywords: Privatization; Control structure; Performance (search for similar items in EconPapers)
JEL-codes: G32 G38 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119915000735
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:42:y:2017:i:c:p:392-407

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-10-20
Handle: RePEc:eee:corfin:v:42:y:2017:i:c:p:392-407