Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine

Kornieieva Iuliia

doi:doi:10.11648/j.jpsir.20180101.12

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Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine

Kornieieva Iuliia

Published in Journal of Political Science and International Relations (Volume 1, Issue 1)

Received: 4 November 2017 Accepted: 20 November 2017 Published: 24 December 2017

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Abstract

This article analyses the use Initial Public Offering (IPO) as one of the priority ways of privatization of large state-owned enterprises, carried out in order to attract long-term investment resources and improve the level of corporate governance in Ukraine. Lack of investment resources in Ukraine causes the need of entering foreign capital markets and attraction foreign investors for privatization processes. The insufficient development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective regulation system of privatization processes. The article considers the specific to Ukrainian state-owned company’s problems of conducting IPO. Such enterprises do not meet the requirements of listing of leading stock exchanges, and therefore require the assistance of financial intermediaries and international donors in the organization of transparent privatization through the sale of shares in the stock markets. The author analysed the advantages of cooperation of Ukrainian state-owned companies with underwriters under the "firm commitment" scheme and risks in case of receiving services from a financial intermediary under the "best efforts" scheme. The article deals with guarantee mechanisms of support of privatization processes aimed at attracting foreign investments. It is emphasized that provision of additional guarantees will contribute to the inflow of capital. The author proposes a mechanism for the provision of privatization compensatory guarantees to the underwriters by international financial organizations for the successful initial public offering of shares of state-owned companies which are subject to privatization in Ukraine.

Published in	Journal of Political Science and International Relations (Volume 1, Issue 1)
DOI	10.11648/j.jpsir.20180101.12
Page(s)	12-19
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

State-Owned Enterprise, Privatization, Stock Exchange, Listing, Share, Privatization Compensatory Guarantees

References

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[3]	Corporatization and Privatization of the Government (2016). Sovereignty Education and Defense Ministry (SEDM).
[4]	Sol Trumbo Vila, Matthijs Peters (2016). The Privatisation Industry in Europe. Transnational Institute, Amsterdam.
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[6]	Krugman P. (2010). The new economic geography, now middle-aged. Regional Studies, 45 (1), 1-7.
[7]	Shapiro C., Willig R. D. (1990). Economic rationales for the scope of privatization. The Political Economy of the Public Sector Reform and Privatization (Suleiman, E. N., Waterbury, J.), Westview Press, Boulder, CO, pp. 55-87.
[8]	Bortolotti B., Faccio M. (2004). Reluctant Privatization. EGGI Working Paper, 4.
[9]	Swee-Sum Lam, Ruth Seow-Kuan Tan, Glenn Tsao-Min Wee (2007). Initial Public Offerings of State-Owned Enterprises: An International Study of Policy Risk. Journal of Financial and Quantitative Analysis, 42 (2), 313-337.
[10]	Fisman, R. (2001). Estimating the Value of Political Connections. American Economic Review, 91, 1095–1102.
[11]	Faccio Mara, Ronald W. Masulis, John J. McConnell (2006). Political Connections and Corporate Bailouts. Journal of Finance, 61, 2597–2635.
[12]	Villalonga, B. (2000). Privatization and efficiency: differentiating ownership effects from political, organizational, and dynamic effect. Journal of Economic Behavior & Organization, 42 (1), 43–77.
[13]	Wang, X., Xu, L. C. and Zhu, T. (2004). State-owned enterprises going public, The case of China. Economics of Transition, 12, 467-487.
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[23]	IPO Watch Europe 2016. (2017). PricewaterhouseCoopers LLP Outlook.

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Kornieieva Iuliia. (2017). Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. Journal of Political Science and International Relations, 1(1), 12-19. https://doi.org/10.11648/j.jpsir.20180101.12

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Kornieieva Iuliia. Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. J. Polit. Sci. Int. Relat. 2017, 1(1), 12-19. doi: 10.11648/j.jpsir.20180101.12

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AMA Style

Kornieieva Iuliia. Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. J Polit Sci Int Relat. 2017;1(1):12-19. doi: 10.11648/j.jpsir.20180101.12

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@article{10.11648/j.jpsir.20180101.12,
  author = {Kornieieva Iuliia},
  title = {Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine},
  journal = {Journal of Political Science and International Relations},
  volume = {1},
  number = {1},
  pages = {12-19},
  doi = {10.11648/j.jpsir.20180101.12},
  url = {https://doi.org/10.11648/j.jpsir.20180101.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jpsir.20180101.12},
  abstract = {This article analyses the use Initial Public Offering (IPO) as one of the priority ways of privatization of large state-owned enterprises, carried out in order to attract long-term investment resources and improve the level of corporate governance in Ukraine. Lack of investment resources in Ukraine causes the need of entering foreign capital markets and attraction foreign investors for privatization processes. The insufficient development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective regulation system of privatization processes. The article considers the specific to Ukrainian state-owned company’s problems of conducting IPO. Such enterprises do not meet the requirements of listing of leading stock exchanges, and therefore require the assistance of financial intermediaries and international donors in the organization of transparent privatization through the sale of shares in the stock markets. The author analysed the advantages of cooperation of Ukrainian state-owned companies with underwriters under the "firm commitment" scheme and risks in case of receiving services from a financial intermediary under the "best efforts" scheme. The article deals with guarantee mechanisms of support of privatization processes aimed at attracting foreign investments. It is emphasized that provision of additional guarantees will contribute to the inflow of capital. The author proposes a mechanism for the provision of privatization compensatory guarantees to the underwriters by international financial organizations for the successful initial public offering of shares of state-owned companies which are subject to privatization in Ukraine.},
 year = {2017}
}

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TY  - JOUR
T1  - Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine
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VL  - 1
IS  - 1
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Author Information

Kornieieva Iuliia

Department of Macroeconomic Regulation & International Economic Relations, Academy of Financial Management, Kyiv, Ukraine

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Plain Text BibTeX RIS

APA Style

Kornieieva Iuliia. (2017). Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. Journal of Political Science and International Relations, 1(1), 12-19. https://doi.org/10.11648/j.jpsir.20180101.12

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ACS Style

Kornieieva Iuliia. Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. J. Polit. Sci. Int. Relat. 2017, 1(1), 12-19. doi: 10.11648/j.jpsir.20180101.12

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AMA Style

Kornieieva Iuliia. Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine. J Polit Sci Int Relat. 2017;1(1):12-19. doi: 10.11648/j.jpsir.20180101.12

Copy | Download

@article{10.11648/j.jpsir.20180101.12,
  author = {Kornieieva Iuliia},
  title = {Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine},
  journal = {Journal of Political Science and International Relations},
  volume = {1},
  number = {1},
  pages = {12-19},
  doi = {10.11648/j.jpsir.20180101.12},
  url = {https://doi.org/10.11648/j.jpsir.20180101.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jpsir.20180101.12},
  abstract = {This article analyses the use Initial Public Offering (IPO) as one of the priority ways of privatization of large state-owned enterprises, carried out in order to attract long-term investment resources and improve the level of corporate governance in Ukraine. Lack of investment resources in Ukraine causes the need of entering foreign capital markets and attraction foreign investors for privatization processes. The insufficient development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective regulation system of privatization processes. The article considers the specific to Ukrainian state-owned company’s problems of conducting IPO. Such enterprises do not meet the requirements of listing of leading stock exchanges, and therefore require the assistance of financial intermediaries and international donors in the organization of transparent privatization through the sale of shares in the stock markets. The author analysed the advantages of cooperation of Ukrainian state-owned companies with underwriters under the "firm commitment" scheme and risks in case of receiving services from a financial intermediary under the "best efforts" scheme. The article deals with guarantee mechanisms of support of privatization processes aimed at attracting foreign investments. It is emphasized that provision of additional guarantees will contribute to the inflow of capital. The author proposes a mechanism for the provision of privatization compensatory guarantees to the underwriters by international financial organizations for the successful initial public offering of shares of state-owned companies which are subject to privatization in Ukraine.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Privatization Through IPO as a Tool of Attracting FDI: The Case of Ukraine
AU  - Kornieieva Iuliia
Y1  - 2017/12/24
PY  - 2017
N1  - https://doi.org/10.11648/j.jpsir.20180101.12
DO  - 10.11648/j.jpsir.20180101.12
T2  - Journal of Political Science and International Relations
JF  - Journal of Political Science and International Relations
JO  - Journal of Political Science and International Relations
SP  - 12
EP  - 19
PB  - Science Publishing Group
SN  - 2640-2785
UR  - https://doi.org/10.11648/j.jpsir.20180101.12
AB  - This article analyses the use Initial Public Offering (IPO) as one of the priority ways of privatization of large state-owned enterprises, carried out in order to attract long-term investment resources and improve the level of corporate governance in Ukraine. Lack of investment resources in Ukraine causes the need of entering foreign capital markets and attraction foreign investors for privatization processes. The insufficient development of institutional conditions in countries with transformational economies is seen as an obstacle to the introduction of an effective regulation system of privatization processes. The article considers the specific to Ukrainian state-owned company’s problems of conducting IPO. Such enterprises do not meet the requirements of listing of leading stock exchanges, and therefore require the assistance of financial intermediaries and international donors in the organization of transparent privatization through the sale of shares in the stock markets. The author analysed the advantages of cooperation of Ukrainian state-owned companies with underwriters under the "firm commitment" scheme and risks in case of receiving services from a financial intermediary under the "best efforts" scheme. The article deals with guarantee mechanisms of support of privatization processes aimed at attracting foreign investments. It is emphasized that provision of additional guarantees will contribute to the inflow of capital. The author proposes a mechanism for the provision of privatization compensatory guarantees to the underwriters by international financial organizations for the successful initial public offering of shares of state-owned companies which are subject to privatization in Ukraine.
VL  - 1
IS  - 1
ER  -

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