Privatization in a Nordic Country: The Case of Iceland

Throstur Olaf Sigurjonsson, Audur Arna Arnardottir

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A wave of privatization enclosed the eighties and nineties both
in developed and undeveloped countries alike. Since the financial crisis of 2008,
many governments have taken over private firms, either in full or partially, hence reactivating the discussion of the effects of privatization. In Iceland a whole banking system collapsed in autumn 2008 leading to an economic crisis where the majority of larger firms became technically bankrupt and state owned banks took over most of them. Whether to privatize all these firms or not has become a debated issue. Future decisions on privatization should rest on understanding past outcomes. This empirical research analyses the changes in operations of Icelandic firms privatized 1992 – 2005 where nearly all potentials for privatization were used. The result suggests that privatization did not lead to significant improvements of the divested state owned firms. Still their operation was efficient, both before and after privatization. On the other hand a control group of private firms improved their performance after privatization.
Original languageEnglish
JournalOrganizacja i Zarządzanie. Kwartalnik Naukowy [Organization and Management. Scientific Quarterly]
Issue number1 (17)
Pages (from-to)135-154
Publication statusPublished - 2012
Externally publishedYes

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