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Performance and Capital Structure of Privatized Firms in Europe

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  • Maria Jose Arcas
  • Patricia Bachiller

Abstract

The objective of this paper is to analyze whether there are differences in performance between private firms and recently privatized firms in the European Union, as well as to determine whether ownership (state-owned versus private) and regulation affect capital structure. Focusing on economic reasons that justify privatizations, we analyze whether there are differences between recently privatized state-owned enterprises (SOEs) and private firms in their profitability, leverage and efficiency during the period 1999-2002. Also, we analyze the determinants of the capital structure of these firms. Contrary to previous studies, our results show that privatized firms are not less efficient than firms with private ownership.

Suggested Citation

  • Maria Jose Arcas & Patricia Bachiller, 2008. "Performance and Capital Structure of Privatized Firms in Europe," Global Economic Review, Taylor & Francis Journals, vol. 37(1), pages 107-123.
    • Handle: RePEc:taf:glecrv:v:37:y:2008:i:1:p:107-123
    DOI: 10.1080/12265080801911980
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    References listed on IDEAS

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    1. Knieps, Günter, 2004. "Privatisation of Network Industries in Germany: A Disaggregated Approach," Discussion Papers 100, University of Freiburg, Institute for Transport Economics and Regional Policy.
    2. da Silva, Luis Correia & Estache, Antonio & Jarvela, Sakari, 2004. "Is debt replacing equity in regulated privatized infrastructure in developing countries?," Policy Research Working Paper Series 3374, The World Bank.
    3. Lihui Tian, 2001. "Government Shareholding and the Value of China's Modern Firms," William Davidson Institute Working Papers Series 395, William Davidson Institute at the University of Michigan.
    4. Günter Knieps, 2004. "Privatisation of Network Industries in Germany: A Disaggregated Approach," CESifo Working Paper Series 1188, CESifo.
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    Cited by:

    1. Cristina Gaio & Inês Pinto & Luís Rodrigues, 2016. "Are State-Owned Firms Less Profitable Than Non-State-Owned Firms? European Evidence," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 21(1), pages 3-24.
    2. Vu, Loan T. & Vu, Anh T. H. & Nguyen, Thao T. P., 2021. "Impacts of Capital Structure and Dividend Policy on the Financial Performance of Listed Companies on Vietnamese Stocks Market," OSF Preprints u8pd9, Center for Open Science.
    3. Mai, Nhat Chi, 2012. "Market timing, taxes and capital structure: evidence from Vietnam," OSF Preprints t3mvs, Center for Open Science.

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