The value-added of investment bankers in privatizations

Investment bankers are important advisors both to vendors and acquirers in privatization transactions. Their utility is derived from a thorough understanding of the process of privatization and from their objectivity in assessing and valuing an enterprise. While the international profile and large size of most privatizations are seemingly attractive, predictable pitfalls can be expected. Gallo's “ten rules of thumb” provide wise counsel to investment banks currently in or contemplating entry into the market for privatization services.     

The privatization of swarzedz furniture company (SFM): Lessons from Poland's first underwritten public offering

The sale through public offering of Poland's Swarzedz Furniture Company demonstrates that relatively complex privatization transactions can be successfully implemented in economies where capital market institutions have not yet fully emerged. However, the company's performance before and after privatization suggests that a change of ownership is a necessary, but not a sufficient, requirement for effective restructuring of a state-owned enterprise in a formerly socialist economy.     

Employees' Attitudes towards Employee Ownership and Financial Participation in Croatia: Experiences and Cases

This paper analyzes specific situation in Croatia regarding role, development, and perspectives of employee participation in ownership and financial results. The model of enterprise privatization in Croatia resulted with a large involvement of employees in the enterprises' ownership. As the first phase of privatization in Croatia is approaching to its end, new, genuine mechanisms of development of the employee financial participation are beginning to emerge. Among them, ESOP plans and management and employee buyouts (MEBO) seem to be most appealing. Such practices can be found primarily in enterprises where a functional symbiosis between management and employees has been preserved or developed, where assets of the enterprise have also been preserved, and an organizational culture based on identification with enterprise and confidence with management has been developed. It seems that such a mutual reliance between employees and management can be very successful in assuring good operation and financial results of (especially large) enterprises during and after the process of transition.     

Privatization in Africa

The state-owned enterprise has become synonymous with governance in Africa. However performance of these enterprises and national economies as a whole has been extremely disappointing. As African governments become more hard pressed to fund national budgets, privatization has gathered momentum as the solution to effect economic adjustment and mobilize sorely needed investment capital. Drum focuses on the privatization programs of Nigeria, Senegal and Togo in his attempt to determine what works and what does not.     

The making of an African success story: The privatization of Kenya Airways

This article explores the transformation of Kenya Airways from a loss‐making stateowned enterprise (SOE) to a very successful, profitable African airline and its relationship with KLM‐Royal Dutch Airlines. First, it analyzes the circumstances leading to the creation of Kenya Airways and then discusses the managerial and financial problems it encountered from the period it was set up until it was privatized. It also attempts to explain why and how Kenya Airways has been able to use privatization to avert liquidation. In this regard, it explores the benefits of privatization for the airline and the country as a whole and highlights lessons learned from this experience for the privatization process and strategies in Africa. © 2005 Wiley Periodicals, Inc.     

中国垄断性产业改革对管制机构的需求

在相当长的时期中,中国对垄断性产业实行国有企业垄断经营的管理体制,但这种传统体制存在低效率问题,这导致对垄断性产业实行以促进竞争与民营化为两大主题的体制改革,而这种改革要求有效管制相协调,从而产生对高效率管制机构的客观需求。     

俄罗斯的私有化改革及其对我国国有企业改革的启示

通过对俄罗斯私有化改革及其公司治理问题的分析,结合目前我国国有企业改革过程中出现的主要问题,指出私有化并不是什么灵丹妙药,不是现代公司治理的必经途径,也不是国有企业改革的充分条件。一个国家在进行企业改革时,既要吸取别国成功经验,也应充分考虑本国改革所依赖的制度环境和市场环境,即本国的国情。     

Maximum-Revenue and Optimum-Welfare Tariffs in International Mixed Duopoly: Does the Order of Firms’ Move Matter?

This paper examines the effect of privatization on the priority of the maximum-revenue tariff and the optimum-welfare tariff in a mixed oligopoly with partial privatization and foreign competition. Major findings of this paper are that: firstly, in a mixed duopoly with partial privatization and asymmetric marginal costs, when the marginal cost of the privatized firm is higher than a critical value, the optimum-welfare tariff will be lower than the maximum-revenue tariff regardless of the order of firms?? move; secondly, if the degree of privatization is sufficiently high and cost is symmetric, the optimum-welfare tariff will be higher than the maximum-revenue tariff; thirdly, if the degree of privatization is sufficiently high and the domestic firm is highly ineffective in production, under Stackelberg public leadership, the optimum-welfare tariff is low and then it is more possible that the optimum-welfare tariff is lower than the maximum-revenue one.     

发展中国家公营企业改革的路径选择

公营企业作为国民经济的重要组成部分,在一国经济发展中扮演着举足轻重的角色。但进入2 0世纪80年代以来,各发展中国家公营企业却普遍面临效益低下,亏损严重的困境。为此,各发展中国家纷纷采取了一系列改革措施,主要包括:推行私有化、营造竞争环境、硬化预算约束、运用管理合同等     

Privatization strategies: Is Brazil moving in the wrong gear?

In the 1980s, marketization strategies gained momentum around the globe. Increasingly, the visible hand was being replaced by a revival of neoliberal growth strategies. Privatization was a response to state-owned enterprise, sluggish performance, and excessive intervention in sectors not requiring assistance. In many countries the state became the problem and not the solution for further gains in competitiveness and efficiency. Privatization strategies were implemented more aggressively in Latin America in the 1980s and early 1990s. In Brazil, the largest economy in Latin America, policymakers used erratic strategies from the early 1980s through the early 1990s. This article addresses the Brazilian privatization experience, paying heed to the dynamics of the different strategies pursued throughout the privatization programs and elaborating on the specific steps taken by the Brazilian policymakers. © 1995 John Wiley & Sons, Inc.     

Cuba's telecommunications market

Two significant steps were taken in 1994 towards putting Cuba on line: the Castro government's partial privatization of its national telecoms enterprise and the lifting of the United States embargo on long distance telecommunications with Cuba. Both have far-reaching implications. Politically they could erode the hardline stance so far taken by both administrations. And the expected modernization of its ancient telecommunications system should make Cuba a more attractive investment target.     

Selling privatization politically

The number of privatization transactions occurring in the world continues to grow apace. Predictions are that over $6 trillion in privatization assets will be sold over the next 20 years.¹ And while the academic debate continues, practitioners continue to garner lessons on how to overcome both technical and political obstacles to implementing privatization transactions. The emerging lessons indicate that it is possible to achieve considerable efficiency and welfare gains from privatization. The real challenges are in finding creative mechanisms for overcoming the political impediments to privatization. The author analyzes the shift in focus from whether efficiency gains are possible with privatization to how to distribute the benefits. Recent innovations to address political constraints are analyzed, such as the greater use of markets to assess the value of firms, the use of giveaways to garner political support, and the array of instruments available to appease nationalistic fears of foreign takeover.     

Privatization of health care services in Canada: Reform or regress?

The emergence of the privatization of health care services as one of the dominant health policy issues in many western industrialized countries is no doubt related to a number of factors, including rising health care costs, fiscal crisis in the form of budgetary deficits, charges of public waste and mismanagement and underfunding, the onset of a new era of political and fiscal conservatism, and professional and corporate antipathy to certain aspects of publicly financed health insurance schemes. The paper discusses the meaning of privatization and stresses the importance of recognizing the different forms of privatization and the need to assess these forms against well specified health policy objectives. Current and proposed forms of privatization in Canada are described and evaluated. It is concluded that there are sound arguments against privatization through user fees for insured physician and hospital services. As for the other forms of privatization there are confusing and inconsistent findings that preclude a definitive conclusion as to the wisdom of a general push for privatization. It is stressed that there are not many empirically established facts about the likely effects of privatization and the many claims about the virtues of privatization are far from substantiated by careful research. In the absence of such evidence the push for reprivatization seems, as some critics have pointed out, ideologically motivated.     

Enterprise Restructuring and Turnaround Management in Russia

Summary

After the wave of privatization has swept Russia, the crucial stage of enterprise restructuring begins. According to various circulating estimates, about half of large enterprises need to be reorganized if they are to prosper in the new market economy of Russia. Some of other enterprises need to be closed immediately so that they cease to drag the Russian economy down by subtracting value from it. On the other hand, there is evidence of fraudulent bankruptcies orchestrated by Russia's powerful managers and designed to strip existing enterprises of valuable assets which are then transferred to private pockets illegally or semi-legally. The Russian Government is trying to cope with these challenges under very difficult conditions of inadequate human and financial resources, unclear market structures (e.g., financial-industrial groups), underdeveloped markets for assets, and social-political pressures to maintain status quo which is not sustainable in the longer term. Legislative and other actions need to be taken to adopt decentralized, imaginative solutions which can bring results under Russia's particular circumstances. No ready-made solutions exist but the Russian Government sees quite a lot of good analogies in the new German Lacnder. Other potential solutions, like debt-for-equity swaps, vulture funds, etc., stem from the Anglo-Saxon or American traditions. All these solutions should be considered carefully. Some of them should be used domestically; others should give Western capital opportunities to assist in the enterprise restructuring and other transition processes in Russia.     

Re-integrating the central Asian republics into the world economy

The dissolution of the former Soviet Union (FSU) and the establishment of the Commonwealth of Independent States (CIS) out of the former Soviet Republics has seen the creation of a number of new independent countries in Central Asia. These six Republics —Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan—are, albeit to different degrees, only at the beginning of the historic process of transformation from a command to a predominantly competitive market-based economic system. This paper¹ will survey the prospects for industrial development and the challenges for enterprise restructuring, privatization and private sector development in four of the republics: Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan.     

Exploring corporate entrepreneurship in privatized firms

This paper reports an analysis of whether state-owned enterprises (SOEs) increase their levels of corporate entrepreneurship after privatization. The study uses agency theory to discuss why SOEs display little entrepreneurial behavior and how privatization may alter this situation by changing firms’ systems of controls and incentives. The study also uses a sample of Spanish firms for its empirical research. Data on these firms were available for three years before and after privatization. The findings show that corporate entrepreneurship increases after privatization when firms are in highly competitive industries, either because competition was greater after privatization or because the firm was already in a highly competitive industry. In summary, corporate entrepreneurship in privatized firms seems to be favored by two factors, a change of ownership and competition.     

Privatization in Russia: What Should be a Firm?

This paper examines a variety of issues associated with the restructuring of Russian industry prior to privatization, from a transactions cost perspective. It is argued that none of the components of the industrial hierarchies inherited from the Soviet system corresponded closely to firms in a modem market economy. Moreover, product–level concentration of production created potential monopoly problems. Ideally, it would have been desirable to restructure Russian industry to create efficient organizations and competitive market structures prior to privatization. However, political and information constraints precluded widespread fine tuning of the existing industrial hierarchies prior to privatization. Given these constraints, the decision of the Gaidar government to focus privatization on ’enterprises’, i.e. the smallest organizational units within the industrial hierarchies, was sensible and led to significant deconcentration of Russian industry. Policies with regard to voluntary separation of subunits of enterprises and aggregation of enterprises prior to privatization also helped to promote deconcentration. Significant additional restructuring of Russian industry is expected now that the mass privatization has been completed.     

中国城市水务产业民营化的绩效评价实证研究

本文从总量水平、生产效率、利润和普遍服务水平四个方面构建了中国城市水务产业民营化的绩效评价指标体系,运用1990-2009年的数据检验了民营化对有关指标的影响。检验结果表明,民营化对增加城市水务产业供水总量和利润均有显著影响,但民营化对提高生产效率和普遍服务水平均没有显著影响。从分析结果看,城市水务产业利润增加很可能是由于水价提高造成的,因此政府必须建立有效的价格管制体系。同时,政府在推进民营化的过程中,应出台激励政策引导民营资本进入管网建设领域,以提高普遍服务水平。     

Privatization in Saudi Arabia: Is slow beautiful?

The aim of this article is to abridge the dearth of academic research on Saudi Arabia's privatization strategy, which is touted by government as key to empowering the business community in the largest economy in the Middle East and North Africa region. Whereas some contend privatization has moved at a slow pace and that the business model employed for privatizing public enterprises lacks commercial business efficiency standards, government retorts that, guided by an organized and sequential process, privatization has been successful. This article maintains that if privatization is to confer the benefits claimed for it and sway international investors equipped with modern managerial skills and technical know‐how, authorities need to accelerate privatization and subject enterprises to steadfast market competitive forces. © 2009 Wiley Periodicals, Inc.     

Policy transfer and policy inertia: privatization in Taiwan

In recent years, privatization seems to have been more talked about than carried out in a number of countries. This study looks at the progress of privatization in Taiwan in the light of the literature on policy transfer. Although the government of Taiwan announced a privatization programme in the late 1980s, by the end of 1998 sales of state-owned enterprises had occurred much more slowly than planned. The first part of the article reviews the literature on policy transfer. Policy transfer has been described as the process by which policies transfer from one country to another due to mimetic, normative or coercive effects. Taiwan's privatization programme is then reviewed and the main barriers to change are identified. The study concludes by considering the implications of Taiwan's record on privatization for our understanding of policy transfer in an international context.