privatising companies do not remedy this by widespread redundancies in the
workforce, but by ambitious growth programmes in investment and output, with
positive ramifications for all per-employee metrics of performance and efficiency. In
line with Gupta (2005) we find that – even partial – privatisation leads to an increase
in the productivity of labour without major layoffs. More generally, based on our
results the pervasive pattern of partial privatisations in the oil and gas sector could be
explained by the fact that governments succeed in capturing large parts of the
performance gains associated with private capital markets without having to cede
majority control. A longer-term, sustained privatisation process might well, however,
be advantageous or even required in order to defend and build on these initial gains in
performance and efficiency.
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