Effect of Institutional and Firm-Specific Characteristics on Post-Privatization Performance: Evidence from Developed Countries

29 Pages Posted: 22 Nov 2004

See all articles by Juliet D'Souza

Juliet D'Souza

Clayton State University - Department of Finance & Economics

William L. Megginson

University of Oklahoma

Robert C. Nash

Wake Forest University

Date Written: November 17, 2004

Abstract

This study adds to the empirical evidence that privatization improves the performance of divested firms and offers preliminary evidence as to why these performance improvements occur. Using a sample of 129 share-issue privatizations from 23 developed (OECD) countries, we first document significant increases in profitability, efficiency, output, and capital expenditure following privatization. Our data indicate that ownership (both private and foreign), degree of economic freedom, and level of capital market development significantly affect post-privatization performance. A comparison to the findings of Boubakri, Cosset, and Guedmani (2004) suggests that several determinants of post-privatization performance improvements differ between developed and developing countries.

Keywords: Privatization, corporate governance

JEL Classification: G32, G38

Suggested Citation

D'Souza, Juliet and Megginson, William L. and Nash, Robert C., Effect of Institutional and Firm-Specific Characteristics on Post-Privatization Performance: Evidence from Developed Countries (November 17, 2004). Available at SSRN: https://ssrn.com/abstract=621762 or http://dx.doi.org/10.2139/ssrn.621762

Juliet D'Souza (Contact Author)

Clayton State University - Department of Finance & Economics ( email )

5900 North Lee Street
Morrow, GA 30260
United States
770-961-3410 (Phone)

William L. Megginson

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-

Robert C. Nash

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

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