The Financial Economics of Privatization

by Megginson, William L.

• ISBN13: 9780195150629
• ISBN10: 0195150627
• Format: Hardcover
• Copyright: 2005-01-13
• Publisher: Oxford University Press

Summary

Since 1981, over 100 governments around the world have raised over $1 trillion through the sale of SOEs to private investors. Privatization programs have transformed the role of the state in virtually all-major economies, and have massively increased the capitalization and liquidity of allnon-U.S. stock markets. The focus of this book lies on where privatization stands today and what are the next frontiers, the why and how behind countries who privatize certain industries, whether privatization works as an economic tool and important insights relevant to financial institutions suchas how to value privatized industries, how share offerings differ from private offerings, and how countries go about harnessing private capital. The book will also represent a key and unique source for information related to the details of asset sales privatization, a summary of statistics ofprivatized companies from 54 international stock exchanges, regulatory changes and sources for privatization information for investors, government officials, bankers and financial specialists. The volume will serve as an invaluable reference for professionals and as a core or supplementary text inprivatization courses.

Table of Contents

The Scope of Privatization	3	(28)
A Brief History of State Ownership Until 1979	5	(9)
The Rise of Privatization, 1979--2002	14	(7)
How Much Privatization Has Actually Occurred?	21	(8)
Summary	29	(2)
Why Do Countries Privatize?	31	(37)
The Theoretical Case for State Ownership of Business Enterprises	35	(3)
The Theoretical Case Against State Ownership of Business Enterprises	38	(4)
Empirical Evidence on State versus Private Ownership	42	(11)
Are There Effective Policy Alternatives to Privatization?	53	(8)
The Fiscal and Macroeconomic Impact of Privatization	61	(5)
Summary	66	(2)
How Do Countries Privatize?	68	(34)
Commercializing and Restructuring SOEs Prior to Sale	69	(11)
Strategic Issues in Planning for the Sale of Specific SOEs	80	(5)
Non-Cash Methods of Privatization: Vouchers and Mass Privatization	85	(6)
Privatizing SOEs Using Trade Sales	91	(5)
Privatizing SOEs Using Public Share Offerings	96	(4)
Summary	100	(2)
Empirical Evidence on Privatization's Effectiveness in Nontransition Economies	102	(52)
Strategic Approach to Classifying and Assessing Tests of Privatization's Effectiveness	103	(17)
Case Study, Single-Industry, and Single-Country Studies: Developed Nations	120	(8)
Case Study, Single-Industry, and Single-Country Studies: Developing Nations	128	(11)
Infrastructure Privatization Studies	139	(13)
Summary	152	(2)
Empirical Evidence on Privatization in Transition Economies	154	(49)
Overview: The Economic Performance of Transition Economies Since 1989	155	(9)
Privatization's Impact on Economic Performance in Transition Economies	164	(11)
Empirical Evidence on Privatization in Central and Eastern Europe	175	(10)
Empirical Evidence on Privatization in Russia and the Former Soviet Republics	185	(8)
The Transition Outlier: Privatization's Impact on China's Economic Performance	193	(8)
Summary	201	(2)
The Structure and Investment Performance of Privatization Share Offerings	203	(31)
Characteristics of Share Issue Privatization Offerings	204	(14)
Initial Returns Earned by Investors in Share Issue Privatizations	218	(4)
Long-Run Returns Earned by Investors in Share Issue Privatizations	222	(10)
Summary	232	(2)
Privatization's Impact on Financial Market Development	234	(36)
The Rise of Capital Market-Based Finance	235	(11)
Privatization's Impact on Stock and Bond Market Development	246	(7)
The Impact of Privatization on Individual and Institutional Share Ownership	253	(6)
Privatization's Impact on International Corporate Governance	259	(5)
What Must Be Done to Develop an Effective Corporate Governance System?	264	(3)
Summary	267	(3)
Privatization Industry Studies: Telecommunications	270	(40)
Overview of the Global Telecommunications (Telecom) Industry	271	(6)
Regulating Privatized Telecoms	277	(8)
The Privatization Wave in Telecoms	285	(11)
The Empirical Evidence on Telecom Privatization (and Regulation)	296	(9)
The Future of Telecom Privatization	305	(5)
Privatization Industry Studies: Commercial Banking	310	(38)
Why Has State Ownership of Commercial Banks Been So Prevalent Historically?	310	(2)
Why Have Governments Launched Bank Privatization Programs?	312	(9)
The Record on Privatizing State-Owned Banks	321	(10)
Empirical Evidence on Banking Privatizations	331	(12)
The Future of Banking Privatization	343	(2)
Summary	345	(3)
Privatization Industry Studies: Energy and Airlines	348	(40)
Privatizing Oil and Gas Companies	349	(17)
Privatizing Electricity Utilities	366	(14)
Privatizing National Airlines	380	(8)
The Lessons and Future of Privatization	388	(19)
Lessons Learned from a Quarter-Century of Privatization Experience	388	(7)
Unresolved Issues in Privatization Policy and Research	395	(5)
The Future of Privatization	400	(7)
Appendix 1 Sample Firms Privatized Through Public Share Offerings, 1961--August 2003	407	(42)
Appendix 2 Contact Information for National Privatization Commissions	449	(8)
Notes	457	(12)
References	469	(36)
Index	505