Download this Paper Open PDF in Browser

Where Does Privatization Work? Understanding the Heterogeneity in Estimated Firm Performance Effects

48 Pages Posted: 11 Jan 2015 Last revised: 12 Jul 2016

J. David Brown

IZA Institute of Labor Economics

John S. Earle

George Mason University - Schar School of Policy and Government; IZA Institute of Labor Economics

Almos Telegdy

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS); Central European University

Date Written: December 9, 2015

Abstract

Why do the reported effects of privatization on firm performance vary so much? This paper re-estimates these effects and tests potential explanations for heterogeneity using comprehensive, long-panel data for 70,000 firms in five East European economies. Estimated average effects are positive, about 5-12%, for measures of profitability, efficiency, and growth, but they vary across countries and time periods. Our analysis of heterogeneity in privatization effectiveness finds little systematic role for firm size, financial dependence, or technological complexity, but shows important variation by fraction privatized, ownership structure, firm quality, and the macroeconomic and institutional environment.

Keywords: privatization methods, ownership structure, business environment, firm performance

JEL Classification: L25, L33, P31

Suggested Citation

Brown, J. David and Earle, John S. and Telegdy, Almos, Where Does Privatization Work? Understanding the Heterogeneity in Estimated Firm Performance Effects (December 9, 2015). GMU School of Public Policy Research Paper No. 15-6. Available at SSRN: https://ssrn.com/abstract=2547819 or http://dx.doi.org/10.2139/ssrn.2547819

J. David Brown

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

John S. Earle (Contact Author)

George Mason University - Schar School of Policy and Government ( email )

3351 Fairfax Drive
MS 3B1
Arlington, VA 22201
United States
703-993-8023 (Phone)

HOME PAGE: http://earle.gmu.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Almos Telegdy

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

7621 Pécs, Papnovelde u. 22
Budapest, H-1112
Hungary

Central European University ( email )

Nador utca 9
Budapest, H-1051
Hungary
+36 1 327 3233 (Phone)
+36 1 327 3232 (Fax)

Paper statistics

Downloads
224
Rank
114,165
Abstract Views
2,794