Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81274
Authors: 
Norbäck, Pehr-Johan
Persson, Lars
Year of Publication: 
2003
Series/Report no.: 
IUI Working Paper 605
Abstract: 
This paper examines the restructuring of state assets in markets deregulated by privatizations and investment liberalizations. We show that the government has a stronger incentive to restructure than the buyer: A firm restructuring only takes into account how much its own profit will increase. The government internalizes that restructuring increases the sales price not only from the increase in the acquirer's profit, but also from a reduced profit for the non-acquirer, whose profits decrease due to its rival's restructuring. We also identify situations where a slow sale can significantly reduce the sales price because of strategic investment and product market effects.
Subjects: 
Privatization
Asset Ownership
Restructuring
JEL: 
D44
L10
L33
L40
P31
Document Type: 
Working Paper

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