Privatization, Investment and Ownership Efficiency
We provide a model that explains the following empirical observations: i) private ownership is more efficient than public ownership, ii) privatizations are associated with increases in efficiency and iii) the increase in efficiency predates the privatization. The two key mechanisms explaining the results are: (i) a government owner keeping control takes into account the negative effect on employment of investment and (ii) a privatizing government has a stronger incentive to invest than an acquiring firm: the government exploits the fact that investments increase the sales price not only due to the increase in the acquirer's profit, but also due to a reduced profit for the non-acquirer.
|Date of creation:||10 Apr 2008|
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- Roland, Gérard & Sekkat, Khalid, 1996.
"Managerial Career Concerns, Privatization and Restructuring in Transition Economies,"
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- Simeon Djankov & Gerhard Pohl, 1997. "Restructuring of Large Firms in Slovakia," William Davidson Institute Working Papers Series 73, William Davidson Institute at the University of Michigan.
- Norbäck, Pehr-Johan & Persson, Lars, 2009.
"The Organization of the Innovation Industry: Entrepreneurs, Venture Capitalists and Oligopolists,"
Working Paper Series
783, Research Institute of Industrial Economics.
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- Norbäck, Pehr-Johan & Persson, Lars, 2004. "The Organization of the Innovation Industry: Entrepreneurs, Venture Capitalists, and Oligopolists," Working Paper Series 626, Research Institute of Industrial Economics.
- Norbäck, Pehr-Johan & Persson, Lars, 2006. "The Organization of the Innovation Industry: Entrepreneurs, Venture Capitalists and Oligopolists," CEPR Discussion Papers 5449, C.E.P.R. Discussion Papers.
- Florencio López-de-Silanes, 1997.
"Determinants of Privatization Prices,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 112(4), pages 965-1025.
- John Bennett & James Maw, 1998.
"Privatisation and Market Structure in a Transition Economy,"
William Davidson Institute Working Papers Series
175, William Davidson Institute at the University of Michigan.
- Bennett, John & Maw, James, 2000. "Privatisation and market structure in a transition economy," Journal of Public Economics, Elsevier, vol. 77(3), pages 357-382, September.
- Bernardo Bortolotti & Marcella Fantini & Domenico Siniscalco, 2001. "Privatisation Around the World: New Evidence from Panel Data," CESifo Working Paper Series 600, CESifo Group Munich.
- Bennedsen, Morten, 2000. "Political ownership," Journal of Public Economics, Elsevier, vol. 76(3), pages 559-581, June.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Bruno Biais & Enrico Perotti, 2002. "Machiavellian Privatization," American Economic Review, American Economic Association, vol. 92(1), pages 240-258, March.
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