Arbeitspapier
Privatization and investment: Crowding-out effects vs financial diversification
In this paper, we study the effect of share issue privatization (SIP) on private investment and financial market under incomplete risk diversification. Risk neutrality and imperfect intertemporal substitutability make investment decreasing in privatization (crowding-out effect). Vice-versa with risk aversion and perfect intertemporal substitutability (diversification effect). Finally, with risk aversion and imperfect intertemporal substitutability, crowding-out effects are more than compensated by diversification effects if and only if risk aversion is sufficiently high (relatively, i.e. compared to the inverse of the elasticity of intertemporal substitution). We establish these results in the most favorable case for the dominance of the crowding-out effect, when the revenues of privatization are devoted to present public consumption.
- Language
-
Englisch
- Bibliographic citation
-
Series: Nota di Lavoro ; No. 108.2002
- Classification
-
Wirtschaft
Criteria for Decision-Making under Risk and Uncertainty
Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
- Subject
-
Crowding-out effect
non-expected preferences
privatization
risk-sharing
Privatisierung
Börsengang
Investition
Verdrängungseffekt
Risikopräferenz
Substitutionselastizität
Zeitpräferenz
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Girmens, Guillaume
Guillard, Michel
- Event
-
Veröffentlichung
- (who)
-
Fondazione Eni Enrico Mattei (FEEM)
- (where)
-
Milano
- (when)
-
2002
- Handle
- Last update
-
10.03.2025, 3:44 PM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Girmens, Guillaume
- Guillard, Michel
- Fondazione Eni Enrico Mattei (FEEM)
Time of origin
- 2002
Other Objects (12)
Crowding-in or Crowding-out: How Infrastructure Investment Affects Household Consumption
Investment crowding-out: Firm-level evidence from Germany
Macroeconomic rates of return of public and private investment: crowding-in and crowding-out effects
Are Government-Linked Corporations Crowding out Private Investment in Malaysia?
Crowding-out durch Staatsverschuldung?
Crowding In or Crowding Out? A Classical-Harrodian Perspective
Privatization, Investment and Ownership Efficiency
Local crowding out in China
Crowding out : ein reales Phänomen?
Rational Expectations and Crowding-Out
Fiskalpolitik, Staatsverschuldung und Crowding-out
Rational Expectations and Crowding-Out
Crowding-in or Crowding-out: How Infrastructure Investment Affects Household Consumption
Investment crowding-out: Firm-level evidence from Germany
Macroeconomic rates of return of public and private investment: crowding-in and crowding-out effects
Are Government-Linked Corporations Crowding out Private Investment in Malaysia?
Crowding-out durch Staatsverschuldung?
Crowding In or Crowding Out? A Classical-Harrodian Perspective
Privatization, Investment and Ownership Efficiency
Local crowding out in China
Crowding out : ein reales Phänomen?
Rational Expectations and Crowding-Out
Fiskalpolitik, Staatsverschuldung und Crowding-out
Rational Expectations and Crowding-Out
Crowding-in or Crowding-out: How Infrastructure Investment Affects Household Consumption
Investment crowding-out: Firm-level evidence from Germany
Macroeconomic rates of return of public and private investment: crowding-in and crowding-out effects
Are Government-Linked Corporations Crowding out Private Investment in Malaysia?
Crowding-out durch Staatsverschuldung?
Crowding In or Crowding Out? A Classical-Harrodian Perspective
Privatization, Investment and Ownership Efficiency
Local crowding out in China
Crowding out : ein reales Phänomen?
Rational Expectations and Crowding-Out
Fiskalpolitik, Staatsverschuldung und Crowding-out