The efficiency of state-owned and privatized firms: Does ownership make a difference?

This paper compares the pre‐ and post‐privatization efficiency of a sample of state‐owned enterprises privatized in Spain with the efficiency of their closest private competitors. We perform a two‐stage double bootstrap data envelopment analysis model. In the first stage the efficiency is estimated through a bootstrapped data envelopment analysis, and then followed in the second stage by a bootstrapped truncated regression. Our results provide evidence that (i) there were no significant differences in efficiency between the state‐owned enterprises and their private counterparts before privatization; and (ii) the efficiency of newly privatized firms significantly increased after their privatization, while private competitors showed no significant improvement during the same post‐privatization period.