Can Governments signal commitment in privatization sales?
AbstractThe literature on staggered privatization sales suggests that governments can effectively signal commitment to not expropriate the future rents of privatized firms. The privatization of telephone firms around the world provides an excellent opportunity to test this theory. Using a sample of repeated privatization sales I test whether governments can effectively signal commitment by selling ownership gradually and transferring managerial control immediately. The use of panel data with fixed-effects provides consistent estimates when commitment is not observed and time-invariant. Unobserved commitment is rendered time-invariant by using repeated sales within a government administration, typically within two years. The results cast doubt on the ability of governments to effectively signal commitment and increase the market value of firms in privatization sales. These results hold for several signals tested.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by IEF in its journal Hacienda Pública Española/Revista de Economía Pública.
Volume (Year): 197 (2011)
Issue (Month): 2 (June)
Privatization; signal; commitment;
Find related papers by JEL classification:
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruno Viani, 2007. "Monopoly rights in the privatization of telephone firms," Public Choice, Springer, vol. 133(1), pages 171-198, October.
- Beck, T.H.L. & Clarke, G. & Groff, A. & Keefer , P. & Walsh, P., 2001. "New tools in comparative political economy: The database of political institutions," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125517, Tilburg University.
- Nakil Sung & Yong-Hun Lee, 2002. "Substitution between Mobile and Fixed Telephones in Korea," Review of Industrial Organization, Springer, vol. 20(4), pages 367-374, June.
- Reinhart, Carmen & Rogoff, Kenneth & Savastano, Miguel, 2003.
13932, University Library of Munich, Germany.
- Massimo Florio & Katiuscia Manzoni, 2004. "Abnormal returns of UK privatizations: from underpricing to outperformance," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 119-136.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Olga Cantó Sánchez) The email address of this maintainer does not seem to be valid anymore. Please ask Olga Cantó Sánchez to update the entry or send us the correct address.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.