Publicization versus Privatization: Recent Worldwide Evidence

Stefano Clò (), Chiara Del Bo, Matteo Ferraris (), Carlo Fiorio (), Massimo Florio and Daniela Vandone ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: This paper analyzes deals involving private and State-owned enterprises (SOEs) worldwide since 2004. We consider four types of deals: privatizations, publicizations, private reorganizations (i.e private firms acquiring a private target) and public reorganizations. (i.e. both acquirers and targets are SOEs). We study whether the pre-deal performance and corporate characteristics of the acquirer and target companies vary across the four types of deals depending on ownership: public or private. Data are taken from Zephyr, which provides information on completed deals worldwide and Orbis, a firm-level dataset. The empirical analysis suggests the following. Some results of previous literature on M&As performed by private firms (‘the inefficiency management hypothesis’) are both confirmed and expanded. Acquirers involved in deals are both larger and better performing than their targets but some qualifications are in order with respect to ownership. The difference in size and performance between acquirers and targets is in fact more pronounced for public with respect to private acquirers. The evidence thus points to an active role of SOEs as acquires, as they significantly out-perform relative to their targets, including private ones, in terms of return on sales. Given these novel findings, further research is needed to examine the motivations behind the different types of deals considered and to verify the role of ownership.

Keywords: Publicization; Privatization; State-owned enterprises; M&As (search for similar items in EconPapers)
JEL-codes: G34 L32 L33 (search for similar items in EconPapers)
Date: 2014-04-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Publicization versus Privatization: Recent worldwide evidence (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2014-04

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