Can Restructuring Gains Be Sustained Without Ownership Changes? Evidence From Withdrawn Privatizations

Journal of Financial and Quantitative Analysis, Forthcoming

53 Pages Posted: 4 Aug 2018 Last revised: 11 Jan 2020

See all articles by Gabriele Lattanzio

Gabriele Lattanzio

Southern Methodist University (SMU) - Finance Department

William L. Megginson

University of Oklahoma

Date Written: December 24, 2019

Abstract

By employing a novel, hand-collected sample of withdrawn and completed share-issue privatizations (SIPs) we show that both groups undergo comparable restructuring processes over the three years preceding the event. We employ matching procedures to explicitly control for the identified restructuring effect, isolating the ultimate consequences of the ownership transfer from state to private investors on corporate policies and performance. We document that, absent the ownership transfer, most of the gains realized during the restructuring process are re-absorbed over the post-treatment period. The transition from state to private ownership thus represents a necessary condition for the long-term success of privatization programs.

Keywords: Privatization, International Financial Markets, Government Policy and Regulation

JEL Classification: G32, G38, G15

Suggested Citation

Lattanzio, Gabriele and Megginson, William L., Can Restructuring Gains Be Sustained Without Ownership Changes? Evidence From Withdrawn Privatizations (December 24, 2019). Journal of Financial and Quantitative Analysis, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3214756 or http://dx.doi.org/10.2139/ssrn.3214756

Gabriele Lattanzio

Southern Methodist University (SMU) - Finance Department ( email )

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)

HOME PAGE: http://faculty-staff.ou.edu/M/William.L.Megginson-

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