PUBLIC OFFERINGS OF STATE-OWNED AND PRIVATELY-OWNED ENTERPRISES - AN INTERNATIONAL COMPARISON

We compare initial offer prices in privatizations to initial prices in public offerings of private companies. The evidence indicates that go vernment officials in the United Kingdom underprice IPOs significantly more than their private company counterparts. In Canada and Malaysia, however, the opposite is true. There does not appear to be a general tendency for privatizations to be underpriced to a greater degree than private company IPOs. We provide additional evidence on the determina nts of privatization initial returns. Our findings indicate that initi al returns are significantly higher in relatively primitive capital ma rkets and for privatized companies in regulated industries.