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RESEARCH PAPER
A New Instrument for Measuring the Local Causal Effect of Privatisation on Firm Performance
1
University of Warsaw, Poland
2
CASE - Center of Social and Economic Research, Poland
3
University of Warsaw, Faculty of Management, Poland
4
FAME|GRAPE, Warsaw, Poland
5
IZA - Institute of Labor Economics, Bonn, Germany
Submission date: 2019-11-26
Final revision date: 2020-03-24
Acceptance date: 2020-07-16
Publication date: 2020-09-30
GNPJE 2020;303(3):35-52
KEYWORDS
JEL CLASSIFICATION CODES
ABSTRACT
Despite an apparent consensus in the literature that privatisation universally leads to an increase in firm performance, the problem of endogeneity bias is profound and has been emphasised in a number of meta-analyses. We propose a new instrument to address the endogeneity bias and apply it to Polish medium-sized and large firms in the period of 1995 to 2008. We find that improvements in firm performance are not universal; in particular, we find no improvement among manufacturing firms privatised to domestic investors.
FUNDING
The support of Narodowe Centrum Nauki (grant no: 2014/13/B/HS4/03260) is gratefully acknowledged.
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