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Measuring the Causal Effect of Privatization on Firm Performance

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  • Jan Hagemejer

    ()
    (National Bank of Poland; Faculty of Economic Sciences, University of Warsaw)

  • Joanna Tyrowicz

    ()
    (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland)

  • Jan Svejnar

    ()
    (Columbia University)

Abstract

Despite an apparent consensus in the literature that privatization leads to increased productivity and profitability of firms, the problem of endogeneity bias is profound and has been emphasized in a number of meta-analyses. We propose a new method to address the endogeneity bias and apply it to a universe of Polish medium and large firms over 1995-2009. Unlike some previous studies we find that improvement in firm performance is a rare phenomenon, which suggests that the endogeneity bias could have been indeed large.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP131.pdf
File Function: First version, 2014
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Bibliographic Info

Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2014-14.

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Length: 16 pages
Date of creation: 2014
Date of revision:
Handle: RePEc:war:wpaper:2014-14

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Keywords: privatization; firm performance; endogeneity bias;

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