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Performance and capital structure of privatized firms in the european union

Author

Listed:
  • Patricia Bachiller

    (Departamento de Contabilidad y Finanzas. Facultad de Ciencias Econ�micas y Empresariales. Universidad de Zaragoza.)

  • Mar�a Jos� Arcas

    (Departamento de Contabilidad y Finanzas. Facultad de Ciencias Econ�micas y Empresariales. Universidad de Zaragoza.)

Abstract

The objective of this paper is to analyze whether there are differences in performance between firms that have been privatized and private firms in the EU. We also analyze whether previous ownership (state-owned versus private) and regulation affect capital structure. Focusing on economic reasons that justify privatizations, we compare the differences in the profitability, leverage and labor intensity of privatized firms in the EU countries with a matched-pairs sample of private firms, during the period 1999-2002. For the total sample, we have found evidence that privatized firms are more profitable, less leveraged and more efficient than private firms. With respect to capital structure, for the total sample, privatization and regulation determine leverage, being the privatized firms less leveraged and the regulated firms more leveraged. However, we have found important differences between zones.

Suggested Citation

  • Patricia Bachiller & Mar�a Jos� Arcas, 2006. "Performance and capital structure of privatized firms in the european union," Documentos de Trabajo dt2006-02, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    • Handle: RePEc:zar:wpaper:dt2006-02
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    More about this item

    Keywords

    privatization; efficiency; capital structure; European Union;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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