Privatization and efficiency: Industry effects of the sale of British Airways Academic Article

abstract

• We analyze the effect of privatization on the performance of British Airways by examining the privatization's impact on airfares and competitors' stock prices. We find that stock prices of U.S. competitors fell a significant 7% upon British Airways' privatization, implying expectation of a more competitive British Airways. Closer rivals of British Airways experienced a greater drop in stock price than more distant rivals. Further, airfares in markets served by British Airways fell significantly upon privatization. The results suggest that a change from government to private ownership improves economic efficiency.

authors

• Eckel, Catherine

published proceedings

• JOURNAL OF FINANCIAL ECONOMICS

altmetric score

• 6.5

author list (cited authors)

• Eckel, C., Eckel, D., & Singal, V.

citation count

• 100

complete list of authors

• Eckel, C||Eckel, D||Singal, V

publication date

• February 1997

publisher

• Elsevier  Publisher

published in

• Journal of Financial Economics  Journal

keywords

• Airlines
• British Airways
• Ownership
• Privatization

Digital Object Identifier (DOI)

• 10.1016/S0304-405X(96)00893-8

start page

• 275

end page

• 298

volume

• 43

issue

• 2

URL

• http%3A%2F%2Fdx.doi.org%2F10.1016%2Fs0304-405x%2896%2900893-8