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Performance and capital structure of privatized firms in the european union

Author

Listed:
  • Patricia Bachiller

    () (Departamento de Contabilidad y Finanzas. Facultad de Ciencias Económicas y Empresariales. Universidad de Zaragoza.)

  • María José Arcas

    (Departamento de Contabilidad y Finanzas. Facultad de Ciencias Económicas y Empresariales. Universidad de Zaragoza.)

Abstract

The objective of this paper is to analyze whether there are differences in performance between firms that have been privatized and private firms in the EU. We also analyze whether previous ownership (state-owned versus private) and regulation affect capital structure. Focusing on economic reasons that justify privatizations, we compare the differences in the profitability, leverage and labor intensity of privatized firms in the EU countries with a matched-pairs sample of private firms, during the period 1999-2002. For the total sample, we have found evidence that privatized firms are more profitable, less leveraged and more efficient than private firms. With respect to capital structure, for the total sample, privatization and regulation determine leverage, being the privatized firms less leveraged and the regulated firms more leveraged. However, we have found important differences between zones.

Suggested Citation

  • Patricia Bachiller & María José Arcas, 2006. "Performance and capital structure of privatized firms in the european union," Documentos de Trabajo dt2006-02, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
  • Handle: RePEc:zar:wpaper:dt2006-02
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    File URL: http://www.dteconz.unizar.es/DT2006-02.pdf
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    References listed on IDEAS

    as
    1. da Silva, Luis Correia & Estache, Antonio & Jarvela, Sakari, 2004. "Is debt replacing equity in regulated privatized infrastructure in developing countries?," Policy Research Working Paper Series 3374, The World Bank.
    2. Jesús Mur & Ana Angulo, 2005. "Model selection strategies in a spatial context," Documentos de Trabajo dt2005-06, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    3. Larramona, Gemma & Sanso, Marcos, 2006. "Migration dynamics, growth and convergence," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 2261-2279, November.
    4. de Miguel, Alberto & Pindado, Julio, 2001. "Determinants of capital structure: new evidence from Spanish panel data," Journal of Corporate Finance, Elsevier, vol. 7(1), pages 77-99, March.
    5. Carmen F. Castejón & Julia Wörz, 2006. "Good or Bad? The Influence of FDI on Output Growth: An industry-level analysis," wiiw Working Papers 38, The Vienna Institute for International Economic Studies, wiiw.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    privatization; efficiency; capital structure; European Union;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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