Home > Publications > Network Papers > Partial Privatization and Firm Performance

Partial Privatization and Firm Performance

Nandini Gupta

Paper  629kb pdf

Most privatization programs begin with a period of partial privatization in which only non-controlling shares of firms are sold on the stock market. Since management control is not transferred to private owners it is widely contended that partial privatization has little impact on firm behavior. This perspective ignores the role that the stock market can play in monitoring and rewarding managerial performance even when the government remains the controlling owner. Using data on the population of Indian state-owned enterprises we find that partial privatization has a positive and highly significant impact on firm sales, profits, and labor productivity.

About the Author

Nandini Gupta
Assistant Professor of Finance
Kelley School of Business, Indiana University

Publication Information

Type Network Paper
Program Privatization
Posted 12/01/02
Download 629kb pdf
# Pages 40