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Are Rushed Privatizations Substandard? Analyzing Firm-level Privatization under Fiscal Pressure

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  • Hagemejer, Jan
  • Svejnar, Jan
  • Tyrowicz, Joanna

Abstract

In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms' efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue).

Suggested Citation

  • Hagemejer, Jan & Svejnar, Jan & Tyrowicz, Joanna, 2018. "Are Rushed Privatizations Substandard? Analyzing Firm-level Privatization under Fiscal Pressure," CEPR Discussion Papers 12991, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12991
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    More about this item

    Keywords

    efficiency; employment; firm size; Performance; Privatization; rushed privatization;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P45 - Economic Systems - - Other Economic Systems - - - International Linkages
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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