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The Benefits Of Privatization: Evidence From Mexico, Florencio López De Silanes, Rafael La Porta
The Benefits Of Privatization: Evidence From Mexico, Florencio López De Silanes, Rafael La Porta
Florencio López de Silanes
Criticisms of privatization have centered around the possibility that the observed higher profitability of privatized companies comes at the expense of the rest of society. In this paper we focus on two of the most likely channels for social losses: (1) increased prices as firms capitalize on the market power; and (2) layoffs and lower wages as firms seek to roll back generous labor contracts. Using data for all 218 non-financial privatizations that took place in Mexico between 1983 and 1991 we find that privatized firms quickly bridge the pre-privatization performance gap with industry-matched control groups. For example, privatization is …
Corporate Ownership Around The World, Florencio López De Silanes, Rafael La Porta, Andrei Shleifer
Corporate Ownership Around The World, Florencio López De Silanes, Rafael La Porta, Andrei Shleifer
Florencio López de Silanes
We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify the ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely held corporations is far less common. The controlling shareholders typically have power over firms significantly in excess of their cash flow rights, primarily …