State Ownership in the EU: Comparative analysis

This paper attempts to investigate the degree to which the change of ownership, in other words, privatization, affects the key performance indicators of companies in the EU up to 4 years after the change. We employed propensity score matching with consequent difference in differences method to estimate overall average treatment on the treated as well as subsequently differentiating between magnitudes of privatization. We find an increase in profitability, leverage and the size in terms of total assets of the privatized firms. Conversely, the size in terms of turnover is negatively affected as a consequence of minority privatization and positively due to the full privatization. Furthermore, we find a sign of the positive correlation between the remaining stake of the government and leverage.