Using a unique panel data set of privatised cement firms in Turkey, we test the hypothesis that privatisation and firm performance are determined simultaneously in a political economy context. By focusing on the short- and medium-run joint relationship between privatisation and firm performance, we find that: i) private sector increases the output in the medium-run, but by changing the scale property of production from increasing returns-to-scale to decreasing returnsto- scale, ii) the only factor that increases the labour productivity in the short run is a decrease in labour stock, iii) the negative impact of labour growth on productivity is less severe during the privatised period, and iv) the likelihood of the privatisation of firms decreases if the number of workers employed in firms is high, if they exhibit favourable short-run performance, if the voter preference is less fractionalised and the government representation is weak in the provinces that they are located, and if they are based in socio-economically less developed regions.
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Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number
2005_17.
Find related papers by JEL classification: O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
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