Do Privatizations Boost Household Shareholding? Evidence from Italy
It is believed that privatizations substantially contributed to boost stock markets through the 1980s and 1990s. However, trough which channels did that materialize? We test whether privatizations –improving households’ acquaintance with the risk and return characteristics of stocks through the massive accompanying advertising campaigns– boosted demand for stocks by enlarging the set of households willing to invest in shares. We use a unique micro-data set collected for a large sample of Italian households on Public Offerings (PO) during 1995-99, the climax of privatizations in Italy. We show that advertising increased the notoriety of the incoming PO at households, and through this furthered households’ propensity to subscribe that PO. Furthermore, the propensity to subscribe the incoming PO also increased as households became better informed about past privatizations. Thus, privatizations expanded households’ share participation in Italy.
|Date of creation:||Jan 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Magenta, 63 - 20123 Milan|
Web page: http://www.feem.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bortolotti, Bernardo & de Jong, Frank & Nicodano, Giovanna & Schindele, Ibolya, 2004.
"Privatization and Stock Market Liquidity,"
SIFR Research Report Series
23, Institute for Financial Research.
- Guiso, Luigi & Jappelli, Tullio, 2000.
"Household Portfolios in Italy,"
CEPR Discussion Papers
2549, C.E.P.R. Discussion Papers.
- Gollier, Christian & Zeckhauser, Richard J, 2002.
"Horizon Length and Portfolio Risk,"
Journal of Risk and Uncertainty,
Springer, vol. 24(3), pages 195-212, May.
- Bodie, Zvi & Merton, Robert C. & Samuelson, William F., 1992.
"Labor supply flexibility and portfolio choice in a life cycle model,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 16(3-4), pages 427-449.
- Zvi Bodie & Robert C. Merton & William F. Samuelson, 1992. "Labor Supply Flexibility and Portfolio Choice in a Life-Cycle Model," NBER Working Papers 3954, National Bureau of Economic Research, Inc.
- Levine, Ross & Zervos, Sara, 1996.
"Stock markets, banks, and economic growth,"
Policy Research Working Paper Series
1690, The World Bank.
- Bernardo Bortolotti & Marcella Fantini & Domenico Siniscalco, 2001. "Privatisation Around the World: New Evidence from Panel Data," CESifo Working Paper Series 600, CESifo Group Munich.
- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2000. "Household Portfolios: An International Comparison," CSEF Working Papers 48, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Christina Paxson, 1990. "Borrowing Constraints and Portfolio Choice," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 535-543.
- Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-43, May.
- Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1996.
"Income Risk, Borrowing Constraints, and Portfolio Choice,"
American Economic Review,
American Economic Association, vol. 86(1), pages 158-72, March.
- Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1994. "Income Risk, Borrowing Constraints and Portfolio Choice," CEPR Discussion Papers 888, C.E.P.R. Discussion Papers.
- Pagano, Marco, 1993. "The flotation of companies on the stock market : A coordination failure model," European Economic Review, Elsevier, vol. 37(5), pages 1101-1125, June.
- Mervyn A. King & Jonathan I. Leape, 1987. "Asset Accumulation, Information, and the Life Cycle," NBER Working Papers 2392, National Bureau of Economic Research, Inc.
- Panetta, F. & Violi, R., 1999.
"Is there an Equity Premium Puzzle in Italy? A Look at Asset Returns, Consumption and Financial Structure Data Over the Last Century,"
353, Banca Italia - Servizio di Studi.
- Fabio Panetta & Roberto Violi, 1999. "Is there an Equity Premium Puzzle in Italy? A Look at Asset Returns, Consumption and Financial Structure Data over the Last Century," Temi di discussione (Economic working papers) 353, Bank of Italy, Economic Research and International Relations Area.
- Gabriella Chiesa & Giovanna Nicodano, 2003. "Privatization and Financial Market Development: Theoretical Issues," Working Papers 2003.1, Fondazione Eni Enrico Mattei.
- Jones, Steven L. & Megginson, William L. & Nash, Robert C. & Netter, Jeffry M., 1999. "Share issue privatizations as financial means to political and economic ends," Journal of Financial Economics, Elsevier, vol. 53(2), pages 217-253, August.
When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2004.3. 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: (barbara racah)
If references are entirely missing, you can add them using this form.