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Reluctant Privatization

  • Bernardo Bortolotti

    (Università di Torino and Fondazione Eni Enrico Mattei)

  • Mara Faccio

    (Vanderbilt University, Owen Graduate School of Management)

We study the evolution of the control structure of 141 privatized firms from OECD countries over the period from 1996 through 2000. We find that governments do not relinquish control after “privatization.” We show that the market-to-book ratios of privatized firms converge through time to those of a control sample. However, this convergence does not depend on whether governments relinquish their control rights. In fact, large government stakes have no negative effect on either adjusted market value or stock price performance.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.130.

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Date of creation: Oct 2004
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Handle: RePEc:fem:femwpa:2004.130
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