From State to Market: A Survey of Empirical Studies on Privatization
Jeffry M. Netter
University of Georgia - Department of Banking and Finance; University of Georgia Law School
William L. Megginson
University of Oklahoma
Journal of Economic Literature, Vol. 39, No. 2, June 2001
This study surveys the literature examining the privatization
of state-owned enterprises(SOEs). We overview the history of privatization, the theoretical and empirical evidence on the relative performance of state owned and privately owned firms, the types of privatization, if and by how much has privatization improved the performance of former SOEs in both non-transition and transition countries, how investors in privatizations have fared, the impact of privatization on the development of capital markets and corporate governance. We concentrate on the empirical evidence on the effects of privatization on firm performance. In most setting privatization "works" in that the firms become more efficient, more profitable, financially healthier, and reward investors. While this holds in both transition and non-transition economies, there is more variation in transition economies. Especially in transition economies, the identity of the new owners and managers is important in determining post-privatization performance.
Number of Pages in PDF File: 88
Keywords: Privatization, Transitional Economics, Equity Offering, International Finance, Corporate Governance, State Owned Enterprises, Public Ownership, Performance
JEL Classification: L33, G34, G32, P31Accepted Paper Series
Date posted: April 4, 2001
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