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Does the Privatization of State Companies Improve Their Performance? Evidence from the Brazilian Case

2001; Taylor & Francis; Volume: 2; Issue: 3-4 Linguagem: Inglês

10.1300/j140v02n03_02

1528-6932

Jairo Laser Procianoy, José Osvaldo Fontoura de Carvalho Sobrinho,

Corporate Finance and Governance

Abstract In this study, a number of economic-financial indicators were compared for 59 Brazilian state companies during the years of 1990 to 1997 before and after they were privatized. of these, 43 were federal companies and the rest were from various states. Thirty represented sales of control and the remaining were sales of minority positions in the companies. The tests performed confirmed the results of earlier empirical studies. The companies became more efficient and profitable after the privatization with the best performance concentrated in the subgroups where control was divested which is consistent with the idea that privatization improves the incentives for workers and administrators of the organization.