The Record on Privatization

Underpricing and aftermarket performance of American depositary receipts (ADR) IPOs

“…In addition, privatization results in improved efficiency and profitability through increased accountability, and professionalism of private managers (Boycko et al, 1996;Dewenter and Malatesta, 1997). Megginson et al (1994Megginson et al ( , 1996 document significant improvements in operating performance in terms of sales, profitability, and capital spending in the post-privatization period. Finally, Dewenter and Malatesta (1997) observe that the pricing of privatization IPOs depends on the objectives of the domestic government.…”

Restructuring State Owned Power Utilities: Qualitative Observations from an Indian Experience

“…Apart from the intention of the government, reform and privatization programmes need strong support and direction from the government (Megginson et al 1996). During the interviews, the World Bank, top management, and the consultants were forthcoming in underlining the commitment demonstrated by the Government of Orissa to implement the power sector reform.…”

Incumbent employees’ resistance to implementing privatization policy

“…Because pre-privatization (pre-structuring) firms tend to be over-manned and to pay excessive wages, incumbent employees have been afraid of privatization. 1 The privatization literature has been mostly concerned with motivation, optimal methods and the desirable post-privatization ownership structure (e.g., Baldwin and Bhattacharyya, 1991;Boardman and Vining, 1989;Bonin, 1992;Bös and Harms, 1997;Boycko et al, 1996;Estrin, 1994;Galal et al, 1992;Haskel and Szymanski, 1993;Hillman, 1992;Jackson and Price, 1994;Kay and Thompson, 1986;Katz and Owen, 1995;Laffont and Tirole, 1992;Megginson and Nash, 1994;Megginson et al, 1996;Roland, 1994;Tian, 2000;Yarrow, 1988, 1991;Yarrow, 1986); scant attention has been given to implementation and the role of the employees' resistance in the successful implementation of privatization and restructuring initiatives. In this paper, we fill this lacuna by studying the effect of a conflict of interests between employees and the government (owners) on the successful implementation of the government's privatization (owners' restructuring) plans, which ultimately determines the cost of the process and the extent of successful implementation.…”