Abnormal returns of UK privatizations: from underpricing to outperformance

Massimo Florio and Katiuscia Manzoni

Applied Economics, 2004, vol. 36, issue 2, 119-136

Abstract: This paper offers a review and discussion of the evidence concerning the underpricing and long-run performance of British PIPOs (Privatization Initial Public Offerings) between 1977 and 1996, i.e. from the first privatization under a Labour Government (British Petroleum), until the last ones by a Conservative Government (Railtrack). More recent years are excluded because the change of government, the introduction of a windfall tax on excess profits of regulated utilities, and changes in the regulatory regime, mark a totally different landscape compared with the previous twenty years. Evidence is found that underpricing was not followed by underperformance, as is usually observed with IPOs, but rather strong outperformance. This trend is decomposed by subgroups within a 55 observations sample, and it is concluded that lax regulation was probably the main driving force of abnormal returns of British PIPOs.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/0003684042000174029 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The abnormal returns of UK privatisations: from underpricing tooutperformance (2002)
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:taf:applec:v:36:y:2004:i:2:p:119-136

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/0003684042000174029

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().