Do Privatizations Boost Household Shareholding? Evidence from Italy

37 Pages Posted: 12 Mar 2004

See all articles by Adolfo Di Carluccio

Adolfo Di Carluccio

Ministry of the Economy and Finance, Government of the Republic of Italy

Giovanni Ferri

LUMSA University

Cecilia Frale

Government of the Italian Republic (Italy) - Department of the Treasury

Ottavio Ricchi

Government of the Italian Republic (Italy) - Ministry of Economy and Finance - RGS

Date Written: January 2004

Abstract

It is believed that privatizations substantially contributed to boost stock markets through the 1980s and 1990s. However, through which channels did that materialize? We test whether privatizations - improving households' acquaintance with the risk and return characteristics of stocks through the massive accompanying advertising campaigns - boosted demand for stocks by enlarging the set of households willing to invest in shares. We use a unique micro-data set collected for a large sample of Italian households on Public Offerings (PO) during 1995-99, the climax of privatizations in Italy. We show that advertising increased the notoriety of the incoming PO at households, and through this furthered households' propensity to subscribe that PO. Furthermore, the propensity to subscribe the incoming PO also increased as households became better informed about past privatizations. Thus, privatizations expanded households' share participation in Italy.

Keywords: Household portfolio choice, Information, Privatizations

JEL Classification: D140, D820, E440, G110

Suggested Citation

Di Carluccio, Adolfo and Ferri, Giovanni and Frale, Cecilia and Ricchi, Ottavio, Do Privatizations Boost Household Shareholding? Evidence from Italy (January 2004). FEEM Working Paper No. 03.2004. Available at SSRN: https://ssrn.com/abstract=500742 or http://dx.doi.org/10.2139/ssrn.500742

Adolfo Di Carluccio

Ministry of the Economy and Finance, Government of the Republic of Italy ( email )

Via XX Settembre, 97
Rome, Rome 00187
Italy
+39.06.4761 3868 (Phone)
+39.06.4884 941 (Fax)

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

Cecilia Frale

Government of the Italian Republic (Italy) - Department of the Treasury ( email )

Via XX Settembre, 87
Rome, 00197
Italy

Ottavio Ricchi (Contact Author)

Government of the Italian Republic (Italy) - Ministry of Economy and Finance - RGS ( email )

Via XX Settembre 97
Rome
Italy
39-06-47614774 (Phone)

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