FEEM working papers "Note di lavoro" series
2004 .130

Reluctant Privatization


Authors: Bernardo Bortolotti, Mara Faccio
Series: Economy and Society
Editor: Fausto Panunzi
Type: Journal
Keywords: Privatization,Corporate governance
JEL n.: L33,D72,G15,H6,K22
JEL: Review of Financial Studies
Pages: Vol. 1, pp. 1-33
Date: 2008

Abstract

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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