Long-Term Performance of Privatization IPOs and Crisis-Era State Investments: Research on Public Ownership Transitions and Market Outcomes

This dissertation investigates the long-term stock performance and dynamics of state-driven equity ownership in capital markets, focusing on two central mechanisms: privatization initial public offerings (PIPOs) and crisis-induced state interventions. Amid renewed public sector engagement in strategic industries, both through privatization and state recapitalization, understanding the implications of such transactions on firm performance, capital markets, and public finances has become increasingly important. The dissertation is structured around three core chapters that form the main body of the research. Each chapter addresses a distinct, yet interrelated aspect of state ownership transitions and contributes to a broader understanding of their financial implications. The first part depicted in Chapter Three presents a systematic literature review of PIPOs across global markets, synthesizing performance results and methodological divergences, while identifying gaps for future empirical research. The second part (Chapter Four) empirically assesses the long-term stock performance of European PIPOs using event study methodologies, benchmark-adjusted return models, and risk-factor regressions. The analysis finds evidence of regionally-adjusted outperformance in the long term, though performance against domestic benchmarks remains statistically insignificant, highlighting the methodological relevance of benchmark composition when assessing PIPO returns. The third part of the main body, constituting Chapter Five, evaluates the financial and market implications of crisis-driven state investments, drawing from a series of high-profile recapitalization cases during the COVID-19 pandemic. These include sovereign rescue packages, hybrid capital injections, and re-nationalizations in strategic sectors such as aviation, heavy industry, and utilities. In this context, the analysis frames the state as an active investor, assessing state aid measures both individually and collectively in terms of their investment characteristics and financial impact. The findings suggest heterogeneous performance outcomes, depending on ownership structure, industry context, and the form of state support. Collectively, the chapters presenting the individual results of my research provide a comprehensive examination of the evolving role of the state as both seller and investor in public equity markets. By addressing both privatization and re-intervention, this dissertation bridges two traditionally separate strands of literature. The results underscore the importance of transaction design, state ownership intensity, and market conditions in shaping the post-transaction trajectories of firms. In doing so, the dissertation contributes to the broader discussion on public capital allocation, market efficiency, and the state’s strategic role in modern capitalism.