Working Paper No. 744

Privatization, Investment and Ownership Efficiency

Published: April 10, 2008Pages: 25Keywords: Privatization; Asset Ownership; Restructuring; OligopolyJEL-codes: D44; L13; L33; L40; P31
Published version

Privatization, Investment and Ownership Efficiency Richard Friberg, Pehr-Johan Norbäck and Lars Persson

We provide a model that explains the following empirical observations: i) private ownership is more efficient than public ownership, ii) privatizations are associated with increases in efficiency and iii) the increase in efficiency predates the privatization. The two key mechanisms explaining the results are: (i) a government owner keeping control takes into account the negative effect on employment of investment and (ii) a privatizing government has a stronger incentive to invest than an acquiring firm: the government exploits the fact that investments increase the sales price not only due to the increase in the acquirer's profit, but also due to a reduced profit for the non-acquirer.

Pehr-Johan Norbäck


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Lars Persson


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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