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Factors affecting the stock price performance of share issued privatizations

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  • Anthony Boardman
  • Claude Laurin

Abstract

Shareholders in many share issued privatizations (SIPs) have enjoyed substantial increases in the value of their investments. This study examines the factors that influence the long-run stock price performance of an international sample of SIPs, focusing on three-year buy and hold returns. After controlling for market-wide changes in stock prices, one finds that the relative size of the company has a negative effect on stock price performance, retained government ownership has a positive effect, the presence of a golden share has a negative effect, initial underpricing has a positive effect, and the timing of the privatization has no effect. Performance also depends on the industry and home country.

Suggested Citation

  • Anthony Boardman & Claude Laurin, 2000. "Factors affecting the stock price performance of share issued privatizations," Applied Economics, Taylor & Francis Journals, vol. 32(11), pages 1451-1464.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:11:p:1451-1464 DOI: 10.1080/00036840050151520
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    References listed on IDEAS

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    Cited by:

    1. Mohammed Omran, 2002. "Initial and Aftermarket Performance of Egyptian Share Issue Privatization," Working Papers 0227, Economic Research Forum, revised 19 Sep 2002.
    2. Farinos, Jose E. & Garcia, C. Jose & Ibanez, Ana Ma, 2007. "Operating and stock market performance of state-owned enterprise privatizations: The Spanish experience," International Review of Financial Analysis, Elsevier, vol. 16(4), pages 367-389.
    3. Boardman, Anthony E. & Vining, Aidan R. & Weimer, David L., 2016. "The long-run effects of privatization on productivity: Evidence from Canada," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1001-1017.
    4. Carla Vieira & Ana Paula Serra, 2006. "Abnormal Returns in Privatization Public Offerings: The case of Portuguese firms," Notas Económicas, Faculty of Economics, University of Coimbra, issue 23, pages 6-34, June.
    5. Feng, Fang & Sun, Qian & Tong, Wilson H. S., 2004. "Do government-linked companies underperform?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2461-2492, October.

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