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How Did State‐Owned Banks Respond To Privatization? Evidence From The Indian Experiment

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  • Saibal Ghosh

Abstract

ABSTRACT**: The paper examines the response of banks to privatization. Using data on all state‐owned banks for the period 1990–2006, the findings indicate that fully state‐owned banks are significantly less profitable than partially privatized ones. The improvements in performance by partially privatized banks are, in fact, sustained after privatization. In addition, the analysis indicates that privatization improves profitability, efficiency and improves bank soundness, while lowering bank risk. While the improvement in bank risk is typically spread out over a much longer period, the progress in terms of profitability and economic efficiency typically occurs in the post‐privatization period.

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  • Saibal Ghosh, 2010. "How Did State‐Owned Banks Respond To Privatization? Evidence From The Indian Experiment," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 81(3), pages 389-421, September.
    • Handle: RePEc:bla:annpce:v:81:y:2010:i:3:p:389-421
    DOI: 10.1111/j.1467-8292.2010.00415.x
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    2. Aidan R. Vining & David L. Weimer, 2016. "The challenges of fractionalized property rights in public‐private hybrid organizations: The good, the bad, and the ugly," Regulation & Governance, John Wiley & Sons, vol. 10(2), pages 161-178, June.
    3. Aidan R. VINING & Anthony E. BOARDMAN & Mark A. MOORE, 2014. "The Theory And Evidence Pertaining To Local Government Mixed Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(1), pages 53-86, March.

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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