From State to Market: A Survey of Empirical Studies on Privatization

88 Pages Posted: 4 Apr 2001

See all articles by Jeffry M. Netter

Jeffry M. Netter

Department of Finance; University of Georgia Law School

William L. Megginson

University of Oklahoma


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.

Keywords: Privatization, Transitional Economics, Equity Offering, International Finance, Corporate Governance, State Owned Enterprises, Public Ownership, Performance

JEL Classification: L33, G34, G32, P31

Suggested Citation

Netter, Jeffry M. and Megginson, William L., From State to Market: A Survey of Empirical Studies on Privatization. Available at SSRN: or

Jeffry M. Netter

Department of Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States
706-542-4450 (Phone)


University of Georgia Law School

225 Herty Drive
Athens, GA 30602
United States

William L. Megginson (Contact Author)

University of Oklahoma ( email )

307 W Brooks, 205A Adams Hall
Norman, OK 73019
United States
(405) 325-2058 (Phone)
(405) 325-1957 (Fax)


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