1. Inicio keyboard_arrow_right
  2. Investigación keyboard_arrow_right
  3. The Evolution of Ownership Structures: Privatization, Business Groups and Pyramids

Biblioteca

Documento de trabajo

The Evolution of Ownership Structures: Privatization, Business Groups and Pyramids

  • person Felipe González

    Felipe Aldunate; Mounu Prem; Francisco Urzúa I.

  • class Documento de Trabajo IE-PUC, N° 523, 2019

Abstract: What is the contribution of privatization to the formation of business groups and pyramids? We use new data to study how Pinochet’s privatizations in Chile (1973-1990) affected the evolution of ownership structures. Using non-privatized firms in the same industry as comparison, and accounting for pre-privatization characteristics, we find that privatized firms were more likely to become part of business groups, began to act as providers of credit within groups, and pyramidal ownership structures were built on top of them. As most privatized firms became part of new (instead of traditional) business groups we argue that this privatization reform facilitated the renovation of elites and contributed to the formation of contemporaneous business groups