Forces and effects in the privatisation process: an empirical study of telecommunications companies in Germany and Romania

Andreas Bartels, Vanessa Just, Andreas Kompalla, Jochen Schmid


Privatisation is supposed to lead to an increased efficiency and performance of a company. However, the internal and external environment of an enterprise is quite complex and many factors influence the organisation before and after the privatisation. The privatisation of a company (especially if it holds a natural monopoly) might be accompanied by a liberalisation of the market and the introduction of regulation. A model was developed which integrates all the major forces and effects with an influence on the performance of the company – incorporating also the peculiarities of transition economies. The model was verified on two telecommunications companies from Germany and Romania and shows inter alia that the effects “Laws and policies” and “Economic condition” may influence the overall performance of privatised companies in transition economies.


Competition; Efficiency; Privatisation; State-owned company; Telecommunications


Brown, J. D., Earle, J. S., & Telegdy, Á. (2004) Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia, and Ukraine, Upjohn Institute Working Paper, no. 04-107, pp. 1-53.

Clifton, J., Comín, F., & Fuentes, D. D. (2003) Privatisation in the European Union – Public Enterprises and Integration, Kluwer Academic Publishers, Dordrecht.

Cuervo, A., Villalonga, B. (2000) Explaining the variance in the performance effects of privatization, Academy of Management Review, 25(3), July 2000, pp. 581-590.

Deutsche Telekom AG (Ed.) (1995-2015) Annual report, Bonn.

Dharwadkar, R., George, G., & Brandes, P. (2000) Privatization in emerging economies: An agency theory perspective, Academy of Management Review, 25(3), July 2000, pp. 650-669.

Dunsire, A., Hartley, K., Parker, D., & Dimitriou, B. (1988) Organisational status and performance: a conceptual framework for testing public choice theories, Public Administration, 66, Winter 1988, pp. 363-388.

Dunsire, A., Hartley, K., & Parker, D. (1991) Organizational status and performance: summary of the findings, Public Administration, 69(1), March 1991, pp. 21-40.

European Commission (2016) Eurostat Database,, accessed September 22, 2016.

Florio, M. (2003) Does Privatisation Matter? The Long-Term Performance of British Telecom over 40 Years, Fiscal Studies, 24(2), June 2003, pp. 197-234.

Jackson, P. M. & Price, C. (1994) Privatisation and regulation: a review of the issues. In Jackson, P. M. & Price, C. M. (Eds.), Privatisation and regulation: A review of the issues, pp. 1-34. Longman Group Limited, Harlow.

Kay, J. A., Thompson, D. J. (1986) Privatisation: A policy in search of a rationale, The Economic Journal, 96(March), No. 381, pp. 18-32.

Knieps, G. (2001) Wettbewerbsökonomie., Springer Verlag, Berlin.

Newman, K. L. (2000) Organizational transformation during institutional upheaval, Academy of Management Review, 25(3), July 2000, pp. 602-619.

Parker, D. (1994) Nationalisation, privatisation, and agency status within government: testing for the importance of ownership. In Jackson, P. M. & Price, C. M. (Eds.), Privatisation and regulation: A review of the issues, pp. 149-169. Longman Group Limited, Harlow.

Parker, D. (2004) Editorial: Lessons from privatisation, Institute of Economic Affairs, September 2004, 24(3), pp. 2-8.

Posner, M. (1984) Privatisation: The frontier between public and private, Policy Studies, 5(1), July, pp. 22-32.

Pryke, R. (1986) The comparative performance of public and private enterprise. In Kay, J., Mayer, C., & Thompson, D. (Eds.), Privatisation and regulation: The UK experience, pp. 101-118. Clarendon Press, Oxford.

Ramamurti, R. (2000) A multilevel model of privatization in emerging economies, Academy of Management Review, 25(3), July 2000, pp. 525-550.

Singh, A. (1975) Take-overs, Economic Natural Selection, and the Theory of the Firm: Evidence from the postwar United Kingdom experience, Economic Journal, 85, September 1975, pp. 497-515.

Statistisches Bundesamt (2016) Verbraucherpreise, Preisindex für Telekommunikationsdienstleistungen, Destatis,, accessed September 22, 2016.

Telekom Romania Communications SA (Ed.) (1999-2015) Annual Report and Consolidated Financial Statements, Bucharest.

Thompson, A. A., Strickland, A. J. (1992) Strategic Management – Concepts and Cases, Irwin, Homewood, IL.

Vickers, J., Yarrow, G. (1988) Privatization: An Economic Analysis, The MIT Press, Cambridge, Massachusetts.

Wallsten, S. J. (1999) An Empirical Analysis of Competition, Privatization, and Regulation in Africa and Latin America, World Bank Policy Research Working Paper No. 2136, The World Bank, Washington, DC.

Williams, J. (1988) A case study in privatizing a major public corporation. In Walker M. A. (Ed.), Privatization: Tactics and Techniques, pp. 23-38. The Fraser Institute, Vancouver.

Zahra, S. A., Ireland, R. D., Gutierrez, I., & Hitt, M. A. (2000) Privatization and Entrepreneurial Transformation: Emerging issues and a future research agenda, Academy of Management Review, 25(3), July 2000, pp. 509-524.

Full Text: PDF

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.