Privatization and the Rise of Global Capital Markets

Abstract

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Privatization and globalization: An empirical analysis

“…When countries promote economic policies that favour private The past twenty-five years have also been marked by an impressive growth in the stock market capitalization of most countries. Boutchkova and Megginson (2000), Perotti and van Oijen (2001) and Bortolotti et al (2007) show that share issue privatizations had a major impact on the growth and liquidity of non-U.S. stock countries launch these programs to attract foreign investment, and financial help from world development agencies. Developing countries thus mostly face foreign inflows.…”

Does the Sustainable PPI Investments Promote Financial Market’s Sustainable Development?

“…Many industrial economists have been "flirting with the idea of PPI and often owed to it" [13], but the efficiency gains of the PPI policy are "neither systematic nor guaranteed" in reality [14]. Most relevant works explicitly or implicitly assume that the privatization policy improves industrial efficiency [15][16][17][18][19][20]. Therefore, the existing literature cannot explain why the PPI policy is prevalent though its efficiency is controversial.…”

“…Development economists have investigated multiple types of capital inflow for financial sector development, e.g., FDI [11], official aids [39] and portfolio investments [40]. Boutchkova and Megginson [15] examine the legal environment effect on stock market development, but no attention is paid on whether the corresponding investments promote FMD.…”

“…In the existing literature, financial market size is measured by the ratio of market capitalization of listed companies expressed as a percentage of GDP [15,17,48,49]. Namely, Capital "…”

2. Privatization in Western Eu rope: Stylized Facts, Outcomes, and Open Issues

“…However, the empirical literature has not established whether privatization contributed to widen share ownership, and to promote popular capitalism, nor that it has significantly shifted political preferences by creating support to market oriented policies in Europe. Boutchkova and Megginson (2000) analyze the evolution of share ownership in a sample of SIPs, concluding that the initial structure of shareholding does not appear to be stable over the long run. Indeed, the striking number of initial shareholders (often over 100,000) declines by 33 percent within five years of the offering.…”