A New Instrument for Measuring the Local Causal Effect of Privatisation on Firm Performance

Jan Hagemejer and Joanna Tyrowicz

Gospodarka Narodowa. The Polish Journal of Economics, 2020, issue 3, 35-52

Abstract: Despite an apparent consensus in the literature that privatisation universally leads to an increase in firm performance, the problem of endogeneity bias is profound and has been emphasised in a number of meta-analyses. We propose a new instrument to address the endogeneity bias and apply it to Polish medium-sized and large firms in the period of 1995 to 2008. We find that improvements in firm performance are not universal; in particular, we find no improvement among manufacturing firms privatised to domestic investors.

Keywords: firm performance; privatisation; endogeneity bias (search for similar items in EconPapers)
JEL-codes: C14 O16 P45 P52 (search for similar items in EconPapers)
Date: 2020
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Working Paper: A new instrument for measuring the local causal effect of privatization on firm performance (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:sgh:gosnar:y:2020:i:3:p:35-52

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