Download This PaperAll Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization
Fisher College of Business Working Paper No. 2022-03-010
Charles A. Dice Center Working Paper No. 2022-10
European Corporate Governance Institute – Finance Working Paper No. 850/2022
97 Pages Posted: 5 Oct 2022 Last revised: 18 Apr 2024
Date Written: April 8, 2024
Abstract
We study how privatization and four variants of private ownership type affect infrastructure performance, focusing on global airports over 25 years. Privatization in general does not improve performance. However, private equity (PE) ownership has strong and persistent positive effects on measures of efficiency, volume, and quality. To address selection, we use close auctions in which both PE and non-PE firms bid. The disparities across ownership types are related to fees charged to airlines, physical capacity expansion, local state capacity, and the presence of a state-owned flag carrier. Overall, PE-owned airports benefit from high-powered incentives and access to capital.
Keywords: Infrastructure, Privatization, PE, Airports
JEL Classification: G32, G38, L32, R42, H54
Suggested Citation: Suggested Citation
Sabrina T Howell (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States
212-998-0913 (Phone)
HOME PAGE: http://www.sabrina-howell.com
Hyeik Kim
University of Alberta - School of Business ( email )
2-43 Business Building
Edmonton, Alberta T6G 2C7
Canada
Michael S. Weisbach
Ohio State University (OSU) - Department of Finance ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium