Does Privatization Affect Economic Growth?: An Evidence From Transition Economies

Abstract

This study examines the relationship between privatization and economic growth. The study test the hypothesis that privatization contributes to boost economic growth in transition economies by exploiting a panel data set including the period 1990 to 2008. The largest sample of the study includes 21 transition economies. Six distinct privatization indicators and two different economic growth indicators were used. In the light of estimation results, a positive correlation between privatization and economic growth was identified. This finding is statistically significant and remains valid for six different privatization and two economic growth indicators. Thus, the results suggest that privatization stimulates economic growth in transition economies, controlling for other factors that may contribute to economic growth.