The Long-Run Return to Investors in Share Issue Privatization

Megginson, William L.; Nash, Robert C.; Netter, Jeffry M.; Schwartz, Adam

doi:10.2307/3666362

Cited by 102 publications

(65 citation statements)

References 15 publications

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“…If that is the case, performance improvements might not be as significant as they should be. Megginson et al (2000) examine 158 SIPs from 33 countries during the period 1981-1997 to see the long-run performance of the share prices. They find statistically significant positive net returns for these firms for all holding periods and for all benchmarks.…”

Section: Performance After Privatizationmentioning

confidence: 99%

China share issue privatization: the extent of its success

Sun

Tong

2003

Journal of Financial Economics

846

548

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We evaluate the performance changes of 634 state-owned enterprises (SOEs) listed on China's two exchanges upon share issuing privatisation (SIP) in the period 1994-1998. We find that SIP is effective in improving SOEs' earnings ability, real sales, and workers' productivity but is not successful in improving profit returns and leverage after privatisation. We also find state ownership having negative impacts on firm performance and legal-person ownership having positive impacts on firm performance after SIP, which suggests that legal persons behave differently from the state government. Surprisingly, foreign ownership does not show uniformly strong, positive impacts on firm performance. r

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Section: Performance After Privatizationmentioning

confidence: 99%

China share issue privatization: the extent of its success

Sun

Tong

2003

Journal of Financial Economics

846

548

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“…Privatization: Megginson et al (2000) examine long-run aftermarket performance for a 36-country sample of 264 privatization IPOs for the period 1981-1997 and show a positive performance irrespective of the considered period (one, three, and five years). Brav and Gompers (1997) show empirically decreasing long-term underperformance of privatized IPO firms.…”

Section: Control Variablesmentioning

confidence: 99%

Management earnings forecasts and IPO performance: evidence of a regime change

Boubaker

Gounopoulos

Kallias

et al. 2016

Rev Quant Finan Acc

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Companies undertaking initial public offerings (IPOs) in Greece were obliged to include next-year profit forecast in their prospectuses, until the regulation changed in 2001 to voluntary forecasting. Drawing evidence from IPOs issued in the period 1993-2015, this is the first study to investigate the effect of disclosure regime on management earnings forecasts and IPO long-term performance. The findings show mainly positive forecast errors (forecasts are lower than actual earnings) and higher long-term returns during the mandatory period, suggesting that the mandatory disclosure requirement causes issuers to systematically bias profit forecasts downwards as they opt for the safety of accounting conservatism. The mandatory disclosure requirement artificially improves IPO share performance. Overall, our results show that mandatory disclosure of earnings forecasts can impede capital market efficiency once it goes beyond historical financial information to involve compulsory projections of future performance.

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“…Yet some studies on Central and Eastern European privatization offerings also find that the difference in initial returns between IPOs and Private IPOs is insignificant. 2 Megginson, Nash, Netter and Schwartz (2000) find positive and statistically positive long-run (1-5 years) returns for a sample of 158 PIPOs from 33 countries from 1981 to 1997.…”

Section: The Portuguese Privatization Programmentioning

confidence: 87%

Abnormal Returns in Privatization Public Offerings: The Case of Portuguese Firms

Serra

Vieira

2005

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abnormal Returns in Privatization Public Offerings: The Case of Portuguese Firms SummaryThis paper provides evidence on abnormal returns of Portuguese privatization public offerings for the period from 1989 to 2001. Previous empirical studies report the existence of underpricing for privatized firms in the short-run and positive abnormal returns in the long run. This study explores the abnormal performance of a comprehensive sample of Portuguese privatization transactions and investigates the determinants of the observed price behavior. Our results are not supportive of the underpricing phenomenon except if we exclude the very extreme observations. The results show further that privatization IPOs underperform private sector IPOs. In the long run, we observe negative abnormal returns. While in early event months, privatization public offerings yield more negative returns than private sector offerings, this effect is reversed in longer horizon periods. Initial underpricing is thus reversed and investors seem to require higher returns in partial privatizations.

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The Long-Run Return to Investors in Share Issue Privatization

Cited by 102 publications

References 15 publications

China share issue privatization: the extent of its success

China share issue privatization: the extent of its success

Management earnings forecasts and IPO performance: evidence of a regime change

Abnormal Returns in Privatization Public Offerings: The Case of Portuguese Firms

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