National culture and privatization: The relationship between collectivism and residual state ownership

Narjess Boubakri, Omrane Guedhami, Chuck C.Y. Kwok, Walid Saffar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

52 Citations (Scopus)


Using a large hand-collected database of 605 privatized firms from 48 countries, we examine the relationship between the collectivism measure of culture and residual state ownership in privatized firms. We find that the continued role of government in privatized firms is positively related to collectivism. This result is robust to using alternative measures of collectivism and government control, as well as when we address the endogeneity of collectivism. Finally, we examine the economic outcomes of culture at the firm level, focusing primarily on performance, efficiency, risk-taking, and valuation measures. We report that privatized firms with high residual state ownership exhibit lower performance, valuation, efficiency, and risk-taking in collectivist societies. Our results suggest that formal institutions are not, as sustained by previous studies, the main/exclusive constraints on the privatization reform.
Original languageEnglish
Pages (from-to)170-190
Number of pages21
JournalJournal of International Business Studies
Issue number2
Publication statusPublished - 1 Feb 2016


  • corporate governance
  • national culture
  • performance
  • privatization

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


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