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In this paper we examine empirically the impact of privatisation on output in the UK, through macroeconomic transmission channels. While most privatisation studies focus on microeconomic shocks, namely at the firm level, we are interested to see whether a large scale privatisation policy, as the one pursued in the UK in the 1980 and 1990s, had a measurable impact on output. This may contribute to the ex post evaluation of this policy and complement the microeconomic evidence. We use quarterly data from 1979 to 1998 of privatisation proceeds, as our impulse policy variable, and of private consumption, gross fixed capital formation, net government expenditures, as transmission channels, and aggregate output as our final response variable. The econometric methodology is based on Structural Vector Auto-regressive models and Impulse Response Functions. Non-stationarity and cointegration properties of the time series have also been considered. We find that privatisation shocks do not have an impact in the consumption-output model, but have a moderate and transitory impact in the investment and the public expenditures models. Such positive demand effects, however, have not been completely matched by supply side effects, and, consequently, privatisation in the UK did not contribute to a sustained economic growth. [ABSTRACT FROM AUTHOR]

In this paper the impact of privatization on macroeconomic performance in the United Kingdom is tested using quarterly data from 1979 to 1999. Privatization proceeds have been included in a simple analytical framework dealing with both demand and supply-side of the economy. Multivariate cointegration techniques have been used in order to consider the nonstationarity of the time series involved. The empirical results show that privatizations have no long-run effects on output in the UK. This result is consistent with microeconomic evidence that shows that in the UK ownership change per se had little impact on long term productivity trends. Moreover it is found that privatization proceeds have contributed to sustaining public expenditures. [ABSTRACT FROM AUTHOR]

This paper offers a review and discussion of the evidence concerning the underpricing and long-run performance of British PIPOs (Privatization Initial Public Offerings) between 1977 and 1996, i.e. from the first privatization under a Labour Government (British Petroleum), until the last ones by a Conservative Government (Railtrack). More recent years are excluded because the change of government, the introduction of a windfall tax on excess profits of regulated utilities, and changes in the regulatory regime, mark a totally different landscape compared with the previous twenty years. Evidence is found that underpricing was not followed by underperformance, as is usually observed with IPOs, but rather strong outperformance. This trend is decomposed by subgroups within a 55 observations sample, and it is concluded that lax regulation was probably the main driving force of abnormal returns of British PIPOs. [ABSTRACT FROM AUTHOR]