Despite an apparent consensus in the literature that privatization leads universally to an increase in firm performance, the problem of endogeneity bias is profound and has been emphasized in a number of meta-analyses. We propose a new instrument to address the endogeneity bias and apply it Polish medium and large firms over 1995-2008. We find that improvement in firm performance is not universal, in particular, we find no improvement among manufacturing firms privatized to domestic investors.
Published version
2020
@Article{Hagemejer2020New,
journal="Gospodarka Narodowa. The Polish Journal of Economics",
volume="forthcoming",
year="2020",
title="A New Instrument for Measuring the Local Causal Effect of Privatisation on Firm Performance ",
author="Hagemejer, Jan and Tyrowicz, Joanna",
}