The big sell: Privatizing East Germany’s economy

Abstract

"Departing from communism, East Germany witnessed history’s most extensive privatization program. While the program sparked global interest as a blueprint for economic transformation, its effectiveness remains disputed. Using unique firm-level data, we examine the program’sobjective to privatize the most competitive firms. We document that firms with higher baseline productivity are more likely to be privatized, yield higher prices, are more often acquired by West Germans, and are more likely to survive 20 years later. Inspecting the inner workings of the privatization agency, we illustrate challenges and lessons for how governments can design and implement industrial policy goals." (Author's abstract, IAB-Doku, © 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

Cite article

Mergele, L., Hennicke, M. & Lubczyk, M. (2025): The big sell: Privatizing East Germany’s economy. In: Journal of Public Economics, Vol. 242. DOI:10.1016/j.jpubeco.2024.105291