Privatization and globalization: An empirical analysis

This paper examines the link between globalization-measured by foreign direct investment (FDI) and foreign portfolio investment (FPI) – and privatization of state-owned enterprises, in a multi-country sample that focuses on developing countries. We hypothesize that privatization has an effect on FDI/FPI as the process of fostering private sector participation is often accompanied by liberalization reforms, and by allocations of substantial shares of newly privatized firms to foreign investors. Similarly, we expect FDI/FPI to foster privatization efforts as new capital inflows, technology and managerial skills that accompany FDI/FPI make the environment more prone to competition, providing governments with incentives to privatize inefficient firms that need to be turned around. This relation is assessed in two ways, first in a dynamic panel using a generalized method of moments approach, and second through panel causality tests. We find a bi-directional positive relation between privatization proceeds and globalization, particularly in the case of FDI.     

A Ten-Year Study of the Effectiveness of an Educative Programme in Ensuring the Ecological Sustainability of Recreational Activities in the Brisbane Ranges National Park,South-Eastern Australia

Managing the spread of cinnamon fungus, an exotic root-rotting pathogen which kills a wide range of native plants, is an over-riding management concern in the Brisbane Ranges National Park of south-eastern Australia. Parks Victoria has implemented a suite of approaches for informing recreational users about the disease and its ecological impacts. To assess longitudinal changes in the effectiveness of the educative programme, recreational users were surveyed in 1993 and in 2003. 81% were not aware of cinnamon fungus dieback in 1993; the proportion in 2003 was almost unchanged at 83%. Despite the lack of awareness of cinnamon fungus dieback, a large majority (76% in 1993; 74% in 2003) of respondents replied that they had viewed information boards in the park or read visitor guides with information on the disease and its ecological impacts. When recreational users were informed of the impact of infection, there was unanimous support for track closures for quarantine purposes. Our findings indicate that current methods of educating recreational users about cinnamon fungus dieback are not effective. Recommendations are made to improve the penetration of the educational and interpretive information, including the incorporation of affective and cognitive approaches.     

Ownership concentration and firm risk: The moderating role of mid-sized blockholders

This study analyzes the relationship between mid-sized blockholders and firm risk. We show that ownership structure matters for firm risk beyond the first largest blockholder. Firms with multiple blockholders take more risk than firms with just one blockholder, even when controlling for the stake of the largest blockholder. Consistent with the diversification argument, we find that firm risk increases by 22% when the number of blockholders increases from one to two. Our results are robust to controlling for blockholder type and firm characteristics. We carry out various robustness checks to tackle endogeneity issues. More generally, we provide evidence that firms’ decisions are affected by mid-sized blockholders and not merely the largest blockholder. This is in line with theoretical predictions.