Mass Privatisation and Partial State Ownership of Firms in Transition Economics
AbstractIn their privatization programs, transition governments have frequently given away shares (so-called `mass privatization'), while maintaining significant minority ownership. We explain the rationality of these policies for an expected net-revenue maximizing government. Our argument rests on a political feasibility constraint, preventing sale at a negative price. This constraint both raises prices that would otherwise be negative to zero, and has an indirect effect: mass privatization and partial retained state ownership may be chosen even if sale of a firm's entire assets would fetch a positive price. They are more likely to be chosen if the government has low bargaining power.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2895.
Date of creation: Sep 2001
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Find related papers by JEL classification:
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform
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- John Bennett & Saul Estrin & James Maw & Giovanni Urga, 2004.
"Privatisation Methods and Economic Growth in Transition Economies,"
2004.105, Fondazione Eni Enrico Mattei.
- Bennett, John & Estrin, Saul & Maw, James & Urga, Giovanni, 2004. "Privatization Methods and Economic Growth in Transition Economies," CEPR Discussion Papers 4291, C.E.P.R. Discussion Papers.
- Sumon Bhaumik & Saul Estrin, 2005.
"How Transition Paths Differ: Enterprise Performance in Russia and China,"
William Davidson Institute Working Papers Series
wp744, William Davidson Institute at the University of Michigan.
- Bhaumik, Sumon Kumar & Estrin, Saul, 2007. "How transition paths differ: Enterprise performance in Russia and China," Journal of Development Economics, Elsevier, vol. 82(2), pages 374-392, March.
- Bhaumik, Sumon Kumar & Estrin, Saul, 2005. "How Transition Paths Differ: Enterprise Performance in Russia and China," CEPR Discussion Papers 4937, C.E.P.R. Discussion Papers.
- Bhaumik, Sumon K. & Estrin, Saul, 2005. "How Transition Paths Differ: Enterprise Performance in Russia and China," IZA Discussion Papers 1484, Institute for the Study of Labor (IZA).
- Sumon Bhaumik & Saul Estrin, 2003. "Why Transition Paths Differ: Russian and Chinese Enterprise Performance Compared," William Davidson Institute Working Papers Series 525, William Davidson Institute at the University of Michigan.
- Saul Estrin, 2002. "Competition and Corporate Governance in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 101-124, Winter.
- Saul Estrin, 2001. "Competition and Corporate Governance in Transition," William Davidson Institute Working Papers Series 431, William Davidson Institute at the University of Michigan.
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