Government Control of Privatized Firms

Posted: 5 Aug 2009

See all articles by Bernardo Bortolotti

Bernardo Bortolotti

Bocconi University; University of Turin

Mara Faccio

Purdue University - Krannert School of Management; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2009

Abstract

We study the change in government control of privatized firms in OECD (Organisation for Economic Co-operation and Development) countries. At the end of 2000, after the largest privatization wave in history, governments retained control of 62.4% of privatized firms. In civil law countries, governments tend to retain large ownership positions, whereas in common law countries they typically use golden shares. When we combine these two mechanisms, we find no association between a country's legal tradition and the extent of government control. Rather, we document more prevalent government influence over privatized firms in countries with proportional electoral rules and with a centralized system of political authority.

Keywords: D72, G15, H6, K22, L33

Suggested Citation

Bortolotti, Bernardo and Faccio, Mara, Government Control of Privatized Firms (August 2009). The Review of Financial Studies, Vol. 22, Issue 8, pp. 2907-2939, 2009. Available at SSRN: https://ssrn.com/abstract=1443055 or http://dx.doi.org/hhn077

Bernardo Bortolotti (Contact Author)

Bocconi University ( email )

Via Sarfatti 25
Milan, MI 20136
Italy

University of Turin

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Torino, Turin - Piedmont 10100
Italy

Mara Faccio

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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European Corporate Governance Institute (ECGI)

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Belgium

HOME PAGE: http://www.ecgi.org

National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

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Singapore, 117592
Singapore

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