Factors affecting the stock price performance of share issued privatizations

Shareholders in many share issued privatizations (SIPs) have enjoyed substa ntial increases in the value of their investments. This study examines the factors that influence the long-run stock price performance of an internati onal sample of SIPs, focusing on three-year buy and hold returns. After con trolling for market-wide changes in stock prices, one finds that the relati ve size of the company has a negative effect on stock price performance, re tained government ownership has a positive effect, the presence of a golden share has a negative effect, initial underpricing has a positive effect, a nd the timing of the privatization has no effect. Performance also depends on the industry and home country.