From State to Market

A Survey of Empirical Studies on Privatization

William Megginson, Jeffry Netter

Paper  411kb pdf

This study surveys the literature examining the privatization of state-owned enterprises(SOEs). We overview the history of privatization, the theoretical and empirical evidence on the relative performance of state owned and privately owned firms, the types of privatization, if and by how much has privatization improved the performance of former SOEs in both non-transition and transition countries, how investors in privatizations have fared, the impact of privatization on the development of capital markets and corporate governance. We concentrate on the empirical evidence on the effects of privatization on firm performance. In most setting privatization "works" in that the firms become more efficient, more profitable, financially healthier, and reward investors. While this holds in both transition and non-transition economies, there is more variation in transition economies. Especially in transition economies, the identity of the new owners and managers is important in determining post-privatization performance.

About the Authors

William L. Megginson
Professor of Finance
University of Oklahoma’s Michael F. Price College of Business

Jeffry Netter
Professor of Banking and Finance
University of Georgia

Publication Information

Type Network Paper
Program Privatization
Posted 04/01/01
Download 411kb pdf
# Pages 88