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    The Effects of Privatization on Efficiency: How Does Privatization Work?

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    10.1016-j.worlddev.2006.01.004.pdf (214.5Kb)
    Date Issued
    2006-09
    Author
    Okten, C.
    Arin, P.
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    Please cite this item using this persistent URL
    http://hdl.handle.net/11693/11491
    Journal
    World Development
    Published as
    http://dx.doi.org/10.1016/j.worlddev.2006.01.004
    Collections
    • Department of Economics [152]
    Publisher
    Elsevier
    Abstract
    Uncovering the effects of privatization is difficult, because privatization of a particular firm usually is not an accident. This paper tests the effects of privatization on productive and allocative (market) efficiency using a rich panel data set of 22 privatized cement plants from Turkey in the 1983-99 period. Since, all public cement firms were privatized and we have preand post-privatization data for all, we are able to avoid the problem of endogeneity associated with sample selection. Our analysis goes beyond just examining the privatization effects and explores how privatization really works. Changes in objectives of the firm (ownership effect) and changes in market structure (environment effect) may both be responsible for privatization outcomes. We find that ownership effects are sufficient to achieve improvements in labor productivity. Our results on allocative efficiency, however, are dependent on changes in the competitive environment. While all plants seem to improve labor productivity through works force reductions, plants privatized to foreign buyers also increase their capital and investment significantly. (c) 2006 Elsevier Ltd. All rights reserved.
    Citation
    Okten, C., & Arin, K. P. (2006). The effects of Privatization on Efficiency: How does privatization work?. World Development, 34(9), 1537-1556.

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    BİLKENT UNIVERSITY

    Copyright © Bilkent University - Library Technical Services | 06800 Bilkent, Ankara TURKEY
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    Contact Us | Send Feedback | Off-Campus Access