Exploring Corporate Entrepreneurship in Privatized Firms Articles uri icon

publication date

  • January 2010

start page

  • 2

end page

  • 8

issue

  • 1

volume

  • 45

International Standard Serial Number (ISSN)

  • 1090-9516

Electronic International Standard Serial Number (EISSN)

  • 1878-5573

abstract

  • This paper reports an analysis of whether state-owned enterprises (SOEs) increase their levels of corporate entrepreneurship after privatization. The study uses agency theory to discuss why SOEs display
    little entrepreneurial behavior and how privatization may alter this
    situation by changing firms' systems of controls and incentives. The
    study also uses a sample of Spanish firms for its empirical research.
    Data on these firms were available for three years before and after
    privatization. The findings show that corporate entrepreneurship
    increases after privatization when firms are in highly competitive
    industries, either because competition was greater after privatization
    or because the firm was already in a highly competitive industry. In
    summary, corporate entrepreneurship in privatized firms seems to be
    favored by two factors, a change of ownership and competition.