When the State Takes Over: Nationalization and Firm Performance

Felipe Gonzalez and Mounu Prem

No 21353, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study a large nationalization program using newly assembled firm data from Chile under Salvador Allende (1970–73). Difference-in-differences estimates show that firms targeted by the program experienced a substantial decline in profitability relative to firms that remained private. Return on assets fell sharply, and targeted firms became less likely to report importing activity. These patterns were concentrated in manufacturing, while firms in strategic and natural-resource activities followed more muted trajectories. We also find suggestive evidence of lower electoral support for the incumbent coalition in more exposed municipalities

Keywords: Nationalization; State-owned enterprises; Firm performance (search for similar items in EconPapers)
JEL-codes: D72 L33 N36 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-bec, nep-min and nep-pol
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