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Are rushed privatizations substandard? Analyzing firm-level privatization under fiscal pressure

Author

Listed:
  • Jan Hagemejer

    (Narodowy Bank Polski
    University of Warsaw
    Group for Research in Applied Economics (GRAPE))

  • Jan Svejnar

    (Columbia University
    Center for Economic Research and Graduate Education and Economics Institute (CERGE-EI)
    Institute of Labor Economics (IZA)
    Center for Economic and Policy Research (CEPR))

  • Joanna Tyrowicz

    (Group for Research in Applied Economics (GRAPE)
    University of Warsaw
    Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU)
    Institute of Labor Economics (IZA))

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

  • Jan Hagemejer & Jan Svejnar & Joanna Tyrowicz, 2018. "Are rushed privatizations substandard? Analyzing firm-level privatization under fiscal pressure," GRAPE Working Papers 27, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:27
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    Cited by:

    1. Wagner, Rodrigo, 2018. "Can the market value state-owned enterprises without privatizing them? An application to natural resources companies," Resources Policy, Elsevier, vol. 59(C), pages 282-290.

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    More about this item

    Keywords

    privatization; rushed privatization; efficiency; firm size; employment; performance;
    All these keywords.

    JEL classification:

    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • 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

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