Why Companies Go Private in Emerging Markets? Evidence from Poland

31 Pages Posted: 11 Feb 2005

See all articles by Oskar Kowalewski

Oskar Kowalewski

IESEG School of Management; LEM - CNRS 9221

Krzysztof Jackowicz

Kozminski University

Date Written: March 2005

Abstract

In recent years the number of going private transactions has sharply increased in emerging markets. The purpose of this study is to establish the financial characteristics of companies that have gone private using a dataset from Poland. We use a probit model to distinguish the difference between firms that went private and companies that did not. We find that the probability of going private grew with a rise in the concentration of foreign ownership, an increase in the relative level of free cash flows, a decrease in the level of long term debt, and a decrease in the liquidity of share trading. The results obtained are important both for investors wishing to identify entities characterized by a high likelihood of going private and for governmental authorities evaluating the methods and rationality of privatization mature state-owned enterprises.

Keywords: going private, free cash flow, information asymmetry, ownership structure, emerging markets

JEL Classification: G32, G34

Suggested Citation

Kowalewski, Oskar and Jackowicz, Krzysztof, Why Companies Go Private in Emerging Markets? Evidence from Poland (March 2005). Available at SSRN: https://ssrn.com/abstract=665641 or http://dx.doi.org/10.2139/ssrn.665641

Oskar Kowalewski (Contact Author)

IESEG School of Management ( email )

1 Parvis de La Défense
Socle de la Grande Arche
Paris La Défense cedex, 92044
France

HOME PAGE: http://www.ieseg.fr/en/faculty-and-research/professor/?id=1740

LEM - CNRS 9221 ( email )

Lille
France

HOME PAGE: http://lem.cnrs.fr/

Krzysztof Jackowicz

Kozminski University ( email )

ul. JagielloDska 57/59
Warsaw, 03-303
Poland

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
288
Abstract Views
1,583
Rank
193,079
PlumX Metrics