Management control and privatization in the United Kingdom

We examine the links between ownership and internal control for a sample of 112 state-owned, privatized, and publicly traded firms in the United Kingd om from 1970 to 1994, Privatized firms with at least four years in the priv ate sector, like established publicly traded firms, exhibit a significant n egative relationship between improved performance and the probability of re signation. Simulations using model estimates show a one-standard-deviation decrease in performance raises the probability of resignation by 90% in pub licly traded firms and by 180% in established privatized firms. State-owned firms and privatized firms in their first four years show no relationship between the probability of resignation and changes in financial performance .