earticle

영어

This paper investigates the long-run stock returns of privatization initial public offering (IPO) firms using a sample of 241 privatization IPOs from 42 countries during the period 1981-2003. We compare one-, three-, and five-year holding period returns of privatization IPOs to those of the domestic stock market indices and to those of size and size-and-book-to-market equity ratio (BM)-matched firms of respective countries. Consistent with previous studies, privatization IPOs have significantly outperformed their domestic stock markets in the long-run. However, they show less consistent abnormal long-term stock performance relative to their size- or size-and-BM-matched benchmark firms. These results confirm the problems inherent in estimating long-run abnormal returns and suggest that previous results on the long-run stock performance of privatization IPOs should be interpreted with caution. Additionally, the market values privatization IPOs without much systematic bias after the IPO, in contrast to private companies’ IPOs. This is consistent with privatization IPOs having less information asymmetry than private IPOs.