X hits on this document

PDF document

PRIVATISING NATIONAL OIL COMPANIES: ASSESSING THE IMPACT ON FIRM PERFORMANCE - page 28 / 30

113 views

0 shares

0 downloads

0 comments

28 / 30

potential benefits from privatisation.26 Furthermore our study suggests that most of

these gains might be realised by partial privatisation alone.

Second, a more detailed analysis of the time pattern of performance changes

indicates that whilst there are immediate one-off improvements following the sale of

shares to private investors, such improvements are usually embedded within a time

trend which starts well before the actual transaction, is clearly connected to the

decision to privatise, and which for the majority of performance metrics becomes less

(rather than more) pronounced after the change in ownership. The benefits of

privatisation therefore accrue over time, and a very considerable share materialises

already in the run-up to privatisation. This very significant anticipation effect supports

earlier empirical findings of Dewenter and Malatesta (2001) and the suggestion by

Yarrow (1986) that the primary goal of privatisation may not be to achieve efficiency

gains, but to perpetuate them in the face of changing political circumstances.

Third, extending the analysis to include any follow-on share issues of the same set

of firms, it has been shown that residual government ownership in the firms and the

question of control transfer to the private sector are not significant drivers of

performance change, except for employment intensity, where higher government

ownership and government control are responsible for substantially higher

employment ratios. The number and timing of any follow-on offerings have limited

incremental explanatory power for firm performance over and above the more

general, gradual improvement process that has been modelled as a time trend.

Whilst our findings support the notion that excess employment is a prominent

inefficiency of NOCs (and correlated with the degree of state influence), most

26 This study found no evidence of privatised NOCs improving their ability to find new oil and gas reserves, so any production increase might accelerate the depletion of conventional reserves. This and potential environmental concerns would need to be traded off against shorter-term price and supply considerations.

28

Document info
Document views113
Page views113
Page last viewedSat Jan 21 15:25:46 UTC 2017
Pages30
Paragraphs1873
Words11467

Comments