Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81210
Authors: 
Friberg, Richard
Norbäck, Pehr-Johan
Persson, Lars
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper 744
Abstract: 
We provide a model that explains the following empirical observations: i) private ownership is more efficient than public ownership, ii) privatizations are associated with increases in efficiency and iii) the increase in efficiency predates the privatization. The two key mechanisms explaining the results are: (i) a government owner keeping control takes into account the negative effect on employment of investment and (ii) a privatizing government has a stronger incentive to invest than an acquiring firm: the government exploits the fact that investments increase the sales price not only due to the increase in the acquirer's profit, but also due to a reduced profit for the non-acquirer.
Subjects: 
Privatization
Asset Ownership
Restructuring
Oligopoly
JEL: 
D44
L13
L33
L40
P31
Document Type: 
Working Paper

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