Working Paper: CEPR ID: DP12991
Authors: Jan Hagemejer; Jan Svejnar; Joanna Tyrowicz
Abstract: In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms’ efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue).
Keywords: privatization; rushed privatization; efficiency; firm size; employment; performance
JEL Codes: P45; P52; C14; O16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| rushed privatization (L33) | total factor productivity (TFP) (D24) |
| rushed privatization (L33) | scale of operations (L25) |
| rushed privatization (L33) | employment levels (J23) |
| nonrushed privatization (L33) | total factor productivity (TFP) (D24) |
| nonrushed privatization (L33) | scale of operations (L25) |
| nonrushed privatization (L33) | employment levels (J23) |