The determinants of privatization prices: evidence from Turkey

Authors: Arin, Kerim Peren1; Okten, Cagla2

Source: Applied Economics, Volume 35, Number 12, 12 August 2003 , pp. 1393-1404(12)

Publisher: Routledge, part of the Taylor & Francis Group

Buy & download fulltext article:

OR

Price: $54.28 plus tax (Refund Policy)

Abstract:

This paper analyses the determinants of privatization prices in a multi-industry study using a sample of 68 recently privatized firms from Turkey. Results show that revenue and market characteristics are significant determinants of privatization prices while current cost and profit indicators are not. It is argued that potential buyers regard these state firms as inefficient, therefore do not take into consideration their current costs and profits in determining their value. When the dependent variable is altered by dividing the firm's privatization price by the firm's sales (revenues), it is found that sales-adjusted privatization prices are responsive to firms' profit margins. However, this result does not hold when the sample is restricted to a single industry. Profit margins along with other profitability and firm efficiency measures are no longer significant determinants of sales-adjusted privatization prices in the cement industry analysis. Unexploited production opportunities measured by capacity utilization ratios, and complete private ownership resume a more important role.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/0003684032000100391

Affiliations: 1: Department of Commerce, Massey University, Auckland, New Zealand 2: Department of Economics, Bilkent University, Bilkent, Ankara 06800 Turkey

Publication date: August 12, 2003

More about this publication?
Related content

Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content

Text size:

A | A | A | A
Share this item with others: These icons link to social bookmarking sites where readers can share and discover new web pages. print icon Print this page