search query: @author Perotti, E. / total: 4
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| Author: | Perotti, E. |
| Title: | Credible privatization |
| Journal: | American Economic Review
1995 : SEP, VOL. 85:4, p. 847-859 |
| Index terms: | ECONOMICS PRIVATIZATION REVIEW |
| Language: | eng |
| Abstract: | Privatization shifts residual income and control to private investors, restricting redistribution and improving incentives; thus rapid privatization should be desirable. Empirically, however, the transfer of ownership as opposed to control, is very gradual. The author offers an explanation based on investors' concern about future interference. A government averse to redistribution retains a passive stake in the firm; the willingness to bear residual risk signals commitment. When a large government stake conflicts with the transfer of control, underpricing may be necessary for separation. |
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