Are Rushed Privatizations Substandard? Analyzing Firm-Level Privatization Under Fiscal Pressure

41 Pages Posted: 18 Jun 2018 Last revised: 25 Jun 2018

See all articles by Jan Hagemejer

Jan Hagemejer

National Bank of Poland; University of Warsaw - Faculty of Economic Sciences

Jan Svejnar

School of International and Public Affairs, Columbia University, NY, USA; CEPR; IZA; CERGE-EI; University of Ljubljana

Joanna Tyrowicz

National Bank of Poland; University of Warsaw

Multiple version iconThere are 2 versions of this paper

Date Written: June 2018

Abstract

In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms' efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue).

Keywords: efficiency, employment, firm size, Performance, Privatization, rushed privatization

JEL Classification: C14, O16, P45, P52

Suggested Citation

Hagemejer, Jan and Svejnar, Jan and Tyrowicz, Joanna, Are Rushed Privatizations Substandard? Analyzing Firm-Level Privatization Under Fiscal Pressure (June 2018). CEPR Discussion Paper No. DP12991. Available at SSRN: https://ssrn.com/abstract=3198143

Jan Hagemejer (Contact Author)

National Bank of Poland ( email )

00-919 Warsaw
Poland

University of Warsaw - Faculty of Economic Sciences ( email )

Dluga Street 44/50
Warsaw, 00-241
Poland

Jan Svejnar

School of International and Public Affairs, Columbia University, NY, USA ( email )

420 West 118th Street
New York, NY 10027
United States

CEPR

London
United Kingdom

IZA

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

CERGE-EI

P.O. Box 882
7 Politickych veznu
111 21 Prague 1, Prague
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

University of Ljubljana ( email )

Dunajska 104
Ljubljana, 1000
Slovenia

Joanna Tyrowicz

National Bank of Poland

00-919 Warsaw
Poland

University of Warsaw ( email )

Krakowskie Przedmiescie 26/28
Warszawa, Pl-00681
Poland

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