Premium
Public Offerings of State‐Owned And Privately‐Owned Enterprises: An International Comparison
Author(s) -
DEWENTER KATHRYN L.,
MALATESTA PAUL H.
Publication year - 1997
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1997.tb01125.x
Subject(s) - initial public offering , state owned , business , government (linguistics) , finance , public offering , private sector , monetary economics , capital (architecture) , market economy , financial system , economics , economic growth , linguistics , philosophy , archaeology , history
We compare initial offer prices in privatizations to initial prices in public offerings of private companies. The evidence indicates that government officials in the United Kingdom underprice IPOs significantly more than their private company counterparts. In Canada and Malaysia, however, the opposite is true. There does not appear to be a general tendency for privatizations to be underpriced to a greater degree than private company IPOs. We provide additional evidence on the determinants of privatization initial returns. Our findings indicate that initial returns are significantly higher in relatively primitive capital markets and for privatized companies in regulated industries.