EECS 1530 Lecture 12: EECS 1530 Lecture 12 Notes
21 Jun 2018
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EECS 1530 Lecture 12 Notes
Introduction
Privatization
New opportunities in these countries have arisen since government barriers were
removed.
Several national governments have recently engaged in privatization, which is the selling
of some of their operations to corporations and other investors.
Privatization is popular in Brazil and Mexico, in Eastern European countries such as
Poland and Hungary, and in such Caribbean territories as the Virgin Islands.
It allows for greater international business because foreign firms can acquire operations
sold by national governments.
Privatization was used in Chile to prevent a small group of investors from controlling all
the shares of stock, and in France to prevent a more nationalized economy.
In the United Kingdom, privatization was promoted as a way of spreading stock
ownership across investors, which allowed more people to have a direct stake in the
success of British industry.
The primary reason that the market value of a firm may increase in response to
privatization is the anticipated improvement in managerial efficiency.
Managers in a privately owned firm can focus on the goal of maximizing shareholder
wealth
In contrast, a state-owned business must consider the economic and social ramifications
of any decision.
Also, managers of a privately owned enterprise are more motivated to ensure
profitability because their careers may depend on it.
For these reasons, privatized firms will search for local and global opportunities that
could enhance their value.
The trend toward privatization will undoubtedly create a more competitive global
marketplace.
Document Summary
New opportunities in these countries have arisen since government barriers were removed. For these reasons, privatized firms will search for local and global opportunities that could enhance their value. The trend toward privatization will undoubtedly create a more competitive global marketplace. In these countries have arisen since government barriers were removed. Several national governments have recently engaged in privatization, which is the selling of some of their operations to corporations and other investors. Privatization is popular in brazil and mexico, in eastern european countries such as. Poland and hungary, and in such caribbean territories as the virgin islands. It allows for greater international business because foreign firms can acquire operations sold by national governments. Privatization was used in chile to prevent a small group of investors from controlling all the shares of stock, and in france to prevent a more nationalized economy.
