The effects of privatisation on companies’ economic performance: The Spanish case

This paper provides an evaluation of the effects of privatisation on the efficiency of firms in the case of large Spanish State-Owned Enterprises that had been privatised from 1990 onward. The firms’ efficiency is approached here by financialperformance indicators, through acknowledging, on the one hand, their shortcomings and, on the other, the advantage of their direct comprehensibility. Unlike other research work that compares pre-post privatisation performance, we 1) make use here of usual economic-performance indicators, though taking into account their hierarchical relationship; 2) take as privatisation moment the point at which control over the firm actually passes from the government to private investors; and 3) work on companies’ base data, and exclude all extraordinary and non-operating financial flows. The comparative analysis carried out yields mixed results; most of the evidence points toward the conclusion that the firms’ economic performance did not actually improve after privatisation, the only clear exception being one of the six cases studied here. For correspondence: Joaquim Vergés, ([email protected] ) , tel. +34 93581 1210 Full professor, Department of Business Economics & Administration, UAB 08193 Bellaterra-Cerdanyola (Barcelona), Spain