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Privatization: public offerings and political objectives


  • Germa Bel


This paper empirically analyses the political and economic objectives underlying privatization on the stock market. Particularly, the factors of SIPs underpricing, are explained, and the study analyses whether the change of political parties in government play a role on the issue. The paper has two main findings. First, larger initial returns occurred in the early stages of privatization. Second, the change of government from left-wing to right-wing did not lead to significantly higher levels of underpricing. The results show that governments are quite pragmatic with respect to underpricing: maximizing proceeds from SIPs shows to be more important than ideological differences between parties in government.

Suggested Citation

  • Germa Bel, 2002. "Privatization: public offerings and political objectives," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1421-1432.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:11:p:1421-1432
    DOI: 10.1080/00036840110100826

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    References listed on IDEAS

    1. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    2. Eric A. Hanushek & Dongwook Kim, 1995. "Schooling, Labor Force Quality, and Economic Growth," NBER Working Papers 5399, National Bureau of Economic Research, Inc.
    3. Prescott, Edward C, 1998. "Needed: A Theory of Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-551, August.
    4. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    5. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-468, June.
    6. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-698, June.
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    Cited by:

    1. Chin-Tsai Lin & Yi-Hsien Wang, 2005. "An Analysis of Political Changes on Nikkei 225 Stock Returns and Volatilities," Annals of Economics and Finance, Society for AEF, vol. 6(1), pages 169-183, May.
    2. Cabeza-García, Laura & Gómez-Ansón, Silvia, 2011. "Post-privatisation ownership concentration: Determinants and influence on firm efficiency," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 412-430, September.
    3. Bel, Germà & Trillas, Francesc, 2005. "Privatization, corporate control and regulatory reform: the case of Telefonica," Telecommunications Policy, Elsevier, vol. 29(1), pages 25-51, February.
    4. 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.
    5. Tarcisio da Gra?a, 2012. "Distribution of Underpricing in Privatization Auctions: Evidence from an Event Study," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 1-19, August.
    6. Chin-Tsai Lin & Yi-Hsien Wang, 2007. "The impact of party alternative on the stock market: the case of Japan," Applied Economics, Taylor & Francis Journals, vol. 39(1), pages 79-85.

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