Abstract

Using a microanalytic perspective this dissertation extends the traditional agency theory approach to include a transaction cost framework in examining privatization performance. The basic proposition offered here is that the transaction-specific characteristics of privatization strategies differ in their ability to consolidate (concentrate) ownership and initiate corporate restructuring, and this variance has implications for performance. Hybrid governance is advanced as an organizational implication of trade sale privatization with relevance for subsequent corporate restructuring when transacting under conditions of asset specificity and uncertainty, and is expected to improve privatization performance. This novel hypothesis, along with others, was tested successfully on longitudinal data for a larger sample of developing and emerging economy fixed-line telecommunications operators privatized between 1981 and 1998. Change in telecommunications service provision pre- and post-privatization was used to assess performance in this analysis. A central finding is that hybrid governance predicts privatization performance and these "firm effects" go beyond pure "ownership effects" in capturing additional variation hitherto unexplored in the literature. Specifically, performance benefits of privatization transaction strategy depend upon not only large foreign blockholdings but also the introduction by these owners of hybrid structures, such as joint ventures or complex consortia arrangements. This study is the first to advance a multidimentional construct of privatization implementation, both as an incremental process and comprised of different strategies with unique characteristics, and examine it using a dynamic multilevel model to capture observed yet unexplained performance variance. Also, this research is one of the few statistical studies to examine privatization performance longitudinally, while the sample is one of the largest, to date, drawn from a developing and emerging economy context.