Control Rights Transfer or Stock Listing : Which Matters in Privatization?

Taking advantage of the time gap between privatization and stock listing observed in the Vietnamese privatization, we extract the pure effect of privatization on firm performance and behaviors by isolating it from the stock listing effect. The results suggest that even partial privatization generates sizable performance effects. Privatized companies curtail employment, and labor productivity associated with privatization improves. Vietnamese data are also advantageous for investigating pure stock listing effects, since many listed firms retain 50 percent or more of state ownership. Stock listing significantly decreases capital expenditure and leverage, and there is no robust evidence that listing harms firm performance