Working Paper: CEPR ID: DP4291
Authors: John Bennett; Saul Estrin; James Maw; Giovanni Urga
Abstract: We investigate, using dynamic panel data techniques, the impact of differences in privatization methods, and in private sector and capital market development, on economic growth in transition economies. Mass privatization is found to be the only privatization method to have had a significant positive effect on growth. Stock market development has also had a significant positive impact. Our analysis suggests that in economies with underdeveloped capital markets, the matching of owners to firms under full privatization will be inefficient. This finding has important implications for current privatization policy in developing economies.
Keywords: economic growth; privatization methods; transition
JEL Codes: L33; O40; P27; P31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mass privatization (L33) | economic growth (O49) |
| full privatization (L33) | economic growth (O49) |
| capital market development (O16) | economic growth (O49) |
| mass privatization (L33) | improved ownership structures (G32) |
| improved ownership structures (G32) | economic growth (O49) |
| mass privatization (L33) | corporate governance (G38) |
| corporate governance (G38) | economic growth (O49) |