A new instrument for measuring the local causal effect of privatization on firm performance

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

@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", }