The constraints on full privatization: International evidence

Narjess Boubakri, Jean Claude Cosset, Walid Saffar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

22 Citations (Scopus)


Using a cross-country sample of 406 non-financial firms in 44 countries, we examine, based on firm and country level data, the decisions of governments to resort to gradual, staggered sales that result in full privatization. We report that 168 firms over the 1995–2009 period were fully privatized. It takes seven years on average for a government to completely privatize an SOE. Using the Cox proportional hazard model, we find that full privatization is a slower process in collectivist societies and when political constraints and employment protection laws are more stringent. Finally, we document a positive effect of full privatization on firm outcomes (namely, risk-taking, efficiency, profitability, and growth), supporting previous theoretical and empirical arguments that full relinquishment of control and ownership is required in order to change firms’ objectives.
Original languageEnglish
Pages (from-to)392-407
Number of pages16
JournalJournal of Corporate Finance
Publication statusPublished - 1 Feb 2017


  • Control structure
  • Performance
  • Privatization

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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