Privatization and Efficiency : Differentiating Ownership Effects from Political, Organizational, and Dynamic Effects

This paper argues that the private-public ownership factor should be differentiated from other factors that also influence the effect of privatization on efficiency. This is empirically confirmed in a longitudinal study of 24 Spanish firms, for which several political and organizational factors are found to influence the estimated effects of privatization on efficiency. The analysis of the timing of the effects reveals a strong significance for post-privatization years 5--6 (negative), and 7--8 (positive). This suggests that the negative effect of these factors is transitional, being eventually offset by the positive effects of the change to private ownership