Effect of ownership on efficiency in Spanish companies

Purpose - The purpose of this paper is to analyze the impact of privatization on the efficiency of five of the biggest Spanish state-owned companies: Repsol, Iberia, Endesa, Telefonica and REE, which enjoy monopoly status in sectors like energy, telecommunications and air transport. Design/methodology/approach - The paper applies the Data Envelopment Analysis (DEA) and Tobit analysis to analyze efficiency changes and to determine the effect of the ownership and board structure on technical efficiency. Findings - The results show that the improvements in efficiency are not related to the privatization. Thus the empirical research suggests that a change of ownership per se is not sufficient to bring about the effects forecast by privatization advocators. Research limitations/implications - More research regarding other issues such as organizational changes, strategic alliances and market regulation is needed, as they are factors that explain efficiency variations. Originality/value - The study contributes to the literature on privatization because it adds new empirical evidence about Spain, questioning whether the privatization programs have helped to improve the efficiency of the companies.