Why Do Governments Privatize Abroad?

3 Pages Posted: 19 Oct 2003

See all articles by Bernardo Bortolotti

Bernardo Bortolotti

Bocconi University; University of Turin

Marcella Fantini

National Economic Research Associates Inc. (NERA)

Carlo Scarpa

University of Brescia; NERA Economic Consulting

Abstract

Privatization through global equity market placement has largely contributed to financial market development and integration. Despite the relevance of the fact, the reasons underlying governments' choice to sell shares of privatized companies abroad are still poorly understood. This paper presents new evidence for a sample of 233 share issue privatizations in 20 OECD countries, showing that redistribution concerns and the objective of domestic financial market development make domestic privatization more likely. However, if budget constraints are binding, governments tend to sell abroad a larger quantity of shares, particularly when corporate governance at home is weak.

Suggested Citation

Bortolotti, Bernardo and Fantini, Marcella and Scarpa, Carlo, Why Do Governments Privatize Abroad?. International Review of Finance, Vol. 3, pp. 131-161, June 2002. Available at SSRN: https://ssrn.com/abstract=447350

Bernardo Bortolotti (Contact Author)

Bocconi University ( email )

Via Sarfatti 25
Milan, MI 20136
Italy

University of Turin

Via Po 53
Torino, Turin - Piedmont 10100
Italy

Marcella Fantini

National Economic Research Associates Inc. (NERA) ( email )

Rome
Italy

Carlo Scarpa

University of Brescia ( email )

Via San Faustino 74B
Dipartimento di Scienze Economiche
25122 Brescia
Italy
+39+030+2988+833 (Phone)
+39+030+2988+839/840 (Fax)

NERA Economic Consulting ( email )

50 Main Street, 14th Floor
White Plains, NY 10606
United States

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