IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v35y2003i12p1393-1404.html
   My bibliography  Save this article

The determinants of privatization prices: evidence from Turkey

Author

Listed:
  • Kerim Peren Arin
  • Cagla Okten

Abstract

This paper analyses the determinants of privatization prices in a multi-industry study using a sample of 68 recently privatized firms from Turkey. Results show that revenue and market characteristics are significant determinants of privatization prices while current cost and profit indicators are not. It is argued that potential buyers regard these state firms as inefficient, therefore do not take into consideration their current costs and profits in determining their value. When the dependent variable is altered by dividing the firm's privatization price by the firm's sales (revenues), it is found that sales-adjusted privatization prices are responsive to firms profit margins. However, this result does not hold when the sample is restricted to a single industry. Profit margins along with other profitability and firm efficiency measures are no longer significant determinants of sales-adjusted privatization prices in the cement industry analysis. Unexploited production opportunities measured by capacity utilization ratios, and complete private ownership resume a more important role.

Suggested Citation

  • Kerim Peren Arin & Cagla Okten, 2003. "The determinants of privatization prices: evidence from Turkey," Applied Economics, Taylor & Francis Journals, vol. 35(12), pages 1393-1404.
  • Handle: RePEc:taf:applec:v:35:y:2003:i:12:p:1393-1404 DOI: 10.1080/0003684032000100391
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000100391
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
    2. Caves, Richard E., 1990. "Lessons from privatization in Britain : State enterprise behavior, public choice, and corporate governance," Journal of Economic Behavior & Organization, Elsevier, vol. 13(2), pages 145-169, March.
    3. Jean-Jacques Laffont & Jean Tirole, 1992. "Cost Padding, Auditing and Collusion," Annals of Economics and Statistics, GENES, pages 205-226.
    4. Florencio López-de-Silanes, 1997. "Determinants of Privatization Prices," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 965-1025.
    5. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, pages 321-389.
    6. Altman, Edward I, 1984. " A Further Empirical Investigation of the Bankruptcy Cost Question," Journal of Finance, American Finance Association, vol. 39(4), pages 1067-1089, September.
    7. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    8. Laffont, Jean-Jacques & Tirole, Jean, 1991. "Privatization and Incentives," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 84-105, Special I.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alberto Chong & Virgilio Galdo, 2003. "Streamlining and Privatization Prices in the Telecommunications Industry," Research Department Publications 4319, Inter-American Development Bank, Research Department.
    2. Alberto Chong & Virgilio Galdo, 2006. "Streamlining and Privatization Prices in the Telecommunications Industry," Economica, London School of Economics and Political Science, vol. 73(291), pages 461-484, August.
    3. Gao, Song, 2010. "Impacts of Restructurings on Manufacturing Productive Efficiency: Evidence from China," MPRA Paper 24766, University Library of Munich, Germany.
    4. Alejandro Riaño & Alberto E. Chong, 2006. "Political Environment and Privatization Prices," IDB Publications (Working Papers) 1563, Inter-American Development Bank.
    5. Alberto Chong & Alejandro Riaño, 2006. "Political Environment and Privatization Prices," Research Department Publications 4439, Inter-American Development Bank, Research Department.
    6. Alberto Chong & Jorge Guillen & Alejandro Riano, 2010. "Political and institutional environment and privatization prices," Public Choice, Springer, vol. 142(1), pages 91-110, January.
    7. Fumitoshi Mizutani & Shuji Uranishi, 2010. "Determinants of privatization of public corporations: evidence from the Japanese experience," Empirical Economics, Springer, pages 515-535.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:35:y:2003:i:12:p:1393-1404. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.