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109-609: Discussion of the privatisation of airport operation in Australia commenced in the early 1990s. In April 1994, the Keating government announced that all airports operated by FAC would be privatised in several phases. Melbourne Airport , for example, was to be included in the first phase. A firm decision was made in 1996 by the Howard government that each airport would be leased to an individual operator for 50 years, with an option for

218-583: A Platanus occidentalis (buttonwood tree) in New York City , as 24 stockbrokers signed the Buttonwood Agreement , agreeing to trade five securities under that buttonwood tree. Bombay Stock Exchange was started by Premchand Roychand in 1875. While BSE Limited is now synonymous with Dalal Street, it was not always so. In the 1850s, five stock brokers gathered together under a Banyan tree in front of Mumbai Town Hall, where Horniman Circle

327-435: A "People's Inquiry into Privatisation" (2016/17) found that the impact of privatisation on communities was negative. The report from the inquiry "Taking Back Control" made a range of recommendations to provide accountability and transparency in the process. The report highlighted privatisation in healthcare, aged care, child care, social services, government departments, electricity, prisons and vocational education featuring

436-561: A 49-year extension. Airport divestment was initiated in 1997 with the leasing of Melbourne, Brisbane and Perth Airports, followed by Adelaide , Canberra and Gold Coast airports, the remaining smaller airports in 1998, Sydney Airport in 2002, and the Sydney Basin airports of Bankstown , Camden and Hoxton Park in 2003. At the beginning of 1997 the FAC operated 22 airports and handled over 60 million passenger annually. Melbourne Airport

545-557: A building near the Town Hall until 1928. The present site near Horniman Circle was acquired by the exchange in 1928, and a building was constructed and occupied in 1930. The street on which the site is located came to be called Dalal Street in Hindi (meaning "Broker Street") due to the location of the exchange. On 31 August 1957, the BSE became the first stock exchange to be recognized by

654-500: A central location such as the floor of the exchange or by using an electronic system to process financial transactions. To be able to trade a security on a particular stock exchange, the security must be listed there. Usually, there is a central location for record keeping, but trade is increasingly less linked to a physical place as modern markets use electronic communication networks , which give them advantages of increased speed and reduced cost of transactions. Trade on an exchange

763-414: A form of a secured loan and are criticized as a "particularly noxious form of governmental debt". In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments—the transaction can be considered substantively the same as a secured loan, though it is structured as

872-753: A more cautious and nuanced evaluation of privatization" and that "private ownership alone is no longer argued to automatically generate economic gains in developing economies". According to a 2008 study published in Annals of Public and Cooperative Economics , liberalization and privatization have produced mixed results. Although typically there are many costs associated with these efficiency gains, many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining . Yet, some empirical literature suggests that privatization could also have very modest effects on efficiency and quite regressive distributive impact. In

981-486: A natural and inevitable societal correction emerges to undermine the contradictions of capitalism. This was the case in the 2000 Cochabamba protests . Privatization in Latin America has invariably experienced increasing push-back from the public. Mary Shirley from The Ronald Coase Institute suggests that implementing a less efficient but more politically mindful approach could be more sustainable. In India,

1090-509: A report by the World Federation of Exchanges (WFE) , stock exchanges contribute to economic growth by enabling companies to access long-term capital, thereby fostering innovation and job creation. While stock exchanges are not designed to be platforms for the redistribution of wealth, they play a significant role in allowing both casual and professional stock investors to partake in the wealth generated by profitable businesses. This

1199-556: A sale. This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by "politicians' desires to borrow money surreptitiously", due to legal restrictions on and political resistance to alternative sources of revenue, viz, raising taxes or issuing debt. Privatization had different outcomes around

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1308-478: A specialist in ancient history, posits that economic inequality and wealth concentration in the top percentile "had been made possible by the transfer of state assets to private owners." In Latin America, on the one hand, according to John Nellis's research for Center for Global Development , economic indicators, including firm profitability, productivity, and growth, project positive microeconomic results. On

1417-409: A stock exchange, a company is required to adhere to a set of rules and regulations established by the exchange itself. These regulations serve as a framework for corporate governance, financial transparency, and accountability, thereby ensuring that listed companies operate in a manner that is conducive to investor confidence and market stability. By imposing these standards, stock exchanges contribute to

1526-625: A stock market with high capital. Voucher privatization occurred mainly in the transition economies in Central and Eastern Europe, such as Russia , Poland , the Czech Republic , and Slovakia . Additionally, privatization from below had made important contribution to economic growth in transition economies. In one study assimilating some of the literature on "privatization" that occurred in Russian and Czech Republic transition economies,

1635-741: A survey by the National Commission for Protection of Child Rights (NCPCR) – Utilization of Free Medical Services by Children Belonging to the Economically Weaker Section (EWS) in Private Hospitals in New Delhi, 2011–12: A Rapid Appraisal – indicates under-utilization of the free beds available for EWS category in private hospitals in Delhi, though they were allotted land at subsidized rates. In Australia

1744-412: A transition to "effective private sector owners [of former] state assets". Rather than mainly participating in a market economy, these individuals could prefer elevating their personal status or prefer accumulating political power. Instead, outside foreign investment led to the efficient conduct of former state assets in the private sector and market economy. Through privatization by direct asset sale or

1853-418: A wide and varied scope of owners, companies generally tend to improve management standards and efficiency to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. This improvement can be attributed in some cases to the price mechanism exerted through shares of stock, wherein the price of the stock falls when management

1962-441: Is achieved through the distribution of dividends and the potential for stock price increases leading to capital gains. As a result, individuals who invest in stocks have the opportunity to share in the prosperity of successful companies, effectively participating in a form of wealth redistribution through their investment activities. Thus, while not the primary purpose of stock exchanges, the opportunity for individuals to benefit from

2071-414: Is considered poor (making the firm vulnerable to a takeover by new management) or rises when management is doing well (making the firm less vulnerable to a takeover). In addition, publicly listed shares are subject to greater transparency so that investors can make informed decisions about a purchase. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of

2180-448: Is influenced by the capital market and the political and firm-specific factors. Privatization through the stock market is more likely to be the method used when there is an established capital market capable of absorbing the shares. A market with high liquidity can facilitate the privatization. If the capital markets are insufficiently developed, however, it would be difficult to find enough buyers. The shares may have to be underpriced, and

2289-748: Is little consensus among scholars as to when corporate stock was first traded. Some view the key event as the Dutch East India Company 's founding in 1602, while others point to much earlier developments (Bruges, Antwerp in 1531 and in Lyon in 1548). The first book in history of securities exchange, the Confusion of Confusions, was written by the Dutch-Jewish trader Joseph de la Vega and the Amsterdam Stock Exchange

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2398-590: Is more prevalent in non-privatized sectors. Furthermore, according to the World Bank extralegal and unofficial activities are more prevalent in countries that privatized less. Other research suggests that privatization in Russia resulted in a dramatic rise in the level of economic inequality and a collapse in GDP and industrial output. Russian President Boris Yeltsin 's IMF -backed rapid privatization schemes saw half

2507-497: Is not limitless (it was approximately $ 15 million in 2001 for a biotechnology company). Another alternative source of cash for a private company is a corporate partner, usually an established multinational company, which provides capital for the smaller company in return for marketing rights, patent rights, or equity. Corporate partnerships have been used successfully in a large number of cases. When people draw their savings and invest in shares (through an initial public offering or

2616-580: Is now situated. A decade later, the brokers moved their location to another leafy setting, this time under banyan trees at the junction of Meadows Street and what was then called Esplanade Road, now Mahatma Gandhi Road. With a rapid increase in the number of brokers, they had to shift places repeatedly. At last, in 1874, the brokers found a permanent location, the one that they could call their own. The brokers group became an official organization known as "The Native Share & Stock Brokers Association" in 1875. The Bombay Stock Exchange continued to operate out of

2725-670: Is often considered the oldest "modern" securities market in the world. On the other hand, economist Ulrike Malmendier of the University of California at Berkeley argues that a share market existed as far back as ancient Rome , that derives from Etruscan "Argentari". In the Roman Republic , which existed for centuries before the Empire was founded, there were societates publicanorum , organizations of contractors or leaseholders who performed temple-building and other services for

2834-475: Is open to both the large and small stock investors as minimum investment amounts are minimal. Therefore, the stock exchange provides the opportunity for small investors to own shares of the same companies as large investors. Governments at various levels may decide to borrow money to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds . These bonds can be raised through

2943-405: Is restricted to brokers who are members of the exchange. In recent years, various other trading venues such as electronic communication networks, alternative trading systems and " dark pools " have taken much of the trading activity away from traditional stock exchanges. Initial public offerings of stocks and bonds to investors is done in the primary market and subsequent trading is done in

3052-523: Is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global securities market. Stock exchanges also serve an economic function in providing liquidity to shareholders in providing an efficient means of disposing of shares. In recent years, as the ease and speed of exchanging stocks over digital platforms has increased, volatility in the day-to-day market has increased, too. The beginnings of lending were in Italy in

3161-524: The 2011 revolution , most of the public began to call for re-nationalization, citing allegations of the privatized firms practicing crony capitalism under the old regime. There are various reasons why a government may decide to privatize; commonly due to economic reasons. The economic factors that influence a government's decision to privatize assume this will lower government debt. Studies have shown that governments are more likely to privatise with higher public debt, typically because governments do not have

3270-546: The Alternext , CAC Small , SDAX , TecDAX ). Alternative investment funds refer to funds that include hedge funds, venture capital, private equity, angel funds, real estate, commodities, collectibles, structured products , etc. Alternative investment funds are an alternative to traditional investment options (stocks, bonds, and cash). Companies have also raised significant amounts of capital through R&D limited partnerships . Tax law changes that were enacted in 1987 in

3379-535: The Conservative government of Margaret Thatcher when many state-run firms were sold off to the private sector. The privatization received very mixed views from the public and the parliament. Even former Conservative prime minister Harold Macmillan was critical of the policy, likening it to "selling the family silver". There were around 3 million shareholders in Britain when Thatcher took office in 1979 , but

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3488-583: The European Commission argues that privatisation in Europe had mixed effects on service quality and has achieved only minor productivity gains, driven mainly by lower labour input combined with other cost cutting strategies that led to a deterioration of employment and working conditions. Meanwhile, a different study by the commission found that the UK rail network (which was privatized from 1994 to 1997)

3597-697: The Indian Government under the Securities Contracts Regulation Act. Construction of the present building, the Phiroze Jeejeebhoy Towers at Dalal Street , Fort area , began in the late 1970s and was completed and occupied by the BSE in 1980. Initially named the BSE Towers , the name of the building was changed soon after occupation, in memory of Sir Phiroze Jamshedji Jeejeebhoy , chairman of

3706-614: The Revolutions of 1989 introduced non-communist governments. Freedom House's privatization index, 1998 and 2002 Freedom House 's privatization index rated transition countries from 1 (maximum progress) to 7 (no progress). The table below shows the privatization index for various Eastern European countries in 1998 and 2002: The largest public shares offering in France involved France Télécom . Egypt undertook widespread privatization under Hosni Mubarak . Following his overthrow in

3815-633: The São Paulo Stock Exchange (2007). The Shenzhen Stock Exchange and Shanghai Stock Exchange can be characterized as quasi-state institutions insofar as they were created by government bodies in China and their leading personnel are directly appointed by the China Securities Regulatory Commission . Another example is Tashkent Stock Exchange established in 1994, three years after the collapse of

3924-401: The demutualization of a mutual organization , cooperative , or public-private partnership in order to form a joint-stock company . Separately, privatization can refer to the purchase of all outstanding shares of a publicly traded company by private equity investors, which is more often called "going private" . Before and after this process the company is privately owned, but after

4033-667: The private sector , and the women in the public sector are more likely to be unionized than those in the private sector. In Chile, women are disproportionately affected by the privatization of the pension system because factors such as "women's longer life expectancy, earlier retirement age, and lower rates of labor-force participation, lower salaries" affect their ability to accumulate funds for retirement which leads to lower pensions. Low-income women face an even greater burden; Anjela Taneja, of Oxfam India says "The privatization of public services...implies limited or no access to essential services for women living in poverty, who are often

4142-767: The seasoned equity offering of an already listed company), it usually leads to rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to help companies' management boards finance their organizations. This may promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels of firms. Companies view acquisitions as an opportunity to expand product lines , increase distribution channels, hedge against volatility , increase their market share , or acquire other necessary business assets . A takeover bid or mergers and acquisitions through

4251-456: The secondary market . A stock exchange is often the most important component of a stock market . Supply and demand in stock markets are driven by various factors that, as in all free markets , affect the price of stocks (see stock valuation ). There is usually no obligation for stock to be issued through the stock exchange itself, nor must stock be subsequently traded on an exchange. Such trading may be off exchange or over-the-counter . This

4360-544: The stock indexes can be an indicator of the general trend in the economy. Stock exchanges offer employment opportunities to various individuals such as jobbers and other members who perform activities within the stock exchange. This makes the stock exchange a source of employment, not only for investors but also for the members and their employees. The diverse range of roles within the stock exchange, including trading, analysis, compliance, and administrative functions, creates an ecosystem of employment opportunities that support

4469-508: The stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion. By going public and listing on a stock exchange, companies gain access to a broader pool of investors, which can provide the necessary funds for expansion, research and development, and other growth initiatives. Additionally, being listed on a stock exchange enhances a company's visibility and credibility, making it more attractive to potential partners, customers, and employees. According to

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4578-622: The Americas were overblown. In London, Parliament passed the Bubble Act , which stated that only royally chartered companies could issue public shares. In Paris, Law was stripped of office and fled the country. Stock trading was more limited and subdued in subsequent decades. Yet the market survived, and by the 1790s shares were being traded in the young United States. On May 17, 1792, the New York Stock Exchange opened under

4687-620: The BSE share which is traded in NSE only closed with ₹999. Stock exchanges have multiple roles in the economy. This may include the following: Besides the borrowing capacity provided to an individual or firm by the banking system , in the form of credit or a loan, a stock exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public. Capital intensive companies, particularly high tech companies, typically need to raise high volumes of capital in their early stages. For this reason,

4796-452: The BSE since 1966, following his death. In 1986, the BSE developed the S&;P BSE SENSEX index, giving the BSE a means to measure the overall performance of the exchange. In 2000, the BSE used this index to open its derivatives market, trading S&P BSE SENSEX futures contracts. The development of S&P BSE SENSEX options along with equity derivatives followed in 2001 and 2002, expanding

4905-505: The BSE's trading platform. Historically an open outcry floor trading exchange, the Bombay Stock Exchange switched to an electronic trading system developed by Cmc ltd . in 1995. It took the exchange only 50 days to make this transition. This automated, screen-based trading platform called BSE On-Line Trading (BOLT) had a capacity of 8 million orders per day. Now BSE has raised capital by issuing shares and as on 3 May 2017

5014-553: The ISIN system is used worldwide by funds, companies, and governments. However, when poor financial, ethical or managerial records become public, stock investors tend to lose money as the stock and the company tend to lose value. In the stock exchanges, shareholders of underperforming firms are often penalized by significant share price decline, and they tend as well to dismiss incompetent management teams. As opposed to other businesses that require huge capital outlay, investing in shares

5123-701: The Nazi Party." Great Britain privatized its steel industry in the 1950s, and the West German government embarked on large-scale privatization, including sale of the majority stake in Volkswagen to small investors in public share offerings in 1961. However, it was in the 1980s under Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States that privatization gained worldwide momentum. Notable privatization attempts in

5232-608: The Russian population fall into destitution in just several years as unemployment climbed to double digits by the early to mid 1990s. A 2009 study published in The Lancet medical journal has found that as many as a million working men died as a result of economic shocks associated with mass privatization in the former Soviet Union and in Eastern Europe during the 1990s, although a further study suggested that there were errors in their method and "correlations reported in

5341-615: The Soviet Union, mainly state-owned but has a form of a public corporation ( joint-stock company ). Korea Exchange (KRX) owns 25% less one share of the Tashkent Stock Exchange. In 2018, there were 15 licensed stock exchanges in the United States, of which 13 actively traded securities. All of these exchanges were owned by three publicly traded multinational companies, Intercontinental Exchange , Nasdaq, Inc. , and Cboe Global Markets , except one, IEX . In 2019,

5450-690: The Taoist clergy that a strong ruler was virtually invisible. During the Renaissance , most of Europe was still by and large following the feudal economic model. By contrast, the Ming dynasty in China began once more to practice privatization, especially with regards to their manufacturing industries. This was a reversal of the earlier Song dynasty policies, which had themselves overturned earlier policies in favor of more rigorous state control. In Britain,

5559-406: The UK included privatization of Britoil (1982), the radioactive-chemicals company Amersham International (1982), British Telecom (1984), Sealink ferries (1984), British Petroleum (gradually privatized between 1979 and 1987), British Aerospace (1985 to 1987), British Gas (1986), Rolls-Royce (1987), Rover Group (formerly British Leyland , 1988), British Steel Corporation (1988), and

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5668-515: The United States changed the tax deductibility of investments in R&;D limited partnerships. In order for a partnership to be of interest to investors today, the cash on cash return must be high enough to entice investors. A general source of capital for startup companies has been venture capital . This source remains largely available today, but the maximum statistical amount that the venture company firms in aggregate will invest in any one company

5777-612: The assumption that foreign investment would play a major role. In post- reunification East Germany, by the end of June 1992, the Treuhandanstalt had privatized 8,175 companies, with 5,950 left on hand (4,340 remaining to be sold and the remainder to be liquidated). June 1992 was also when the last East German on the board of the Treuhand left. By the end of 1994, Treuhand had sold almost everything, having only 65 firms left to privatize as of December 1994. More than 80% of

5886-445: The authors identified three methods of privatization: "privatization by sale", "mass privatization", and "mixed privatization". Their calculations showed that "mass privatization" was the most effective method. However, in economies "characterized by shortages" and maintained by the state bureaucracy, wealth was accumulated and concentrated by "gray/black market" operators. Privatizing industries by sale to these individuals did not mean

5995-538: The book described a market that was sophisticated but also prone to excesses, and de la Vega offered advice to his readers on such topics as the unpredictability of market shifts and the importance of patience in investment. In England, the Dutch King William III sought to modernize the kingdom's finances to pay for its wars, and thus the first government bonds were issued in 1693 and the Bank of England

6104-596: The buyout its shares are withdrawn from being traded at a public stock exchange . The term privatizing first appeared in English, with quotation marks, in the New York Times , in April 1923, in a translation of a German speech referring to the potential for German state railroads to be bought by American companies. In German, the word Privatisierung has been used since at least the 19th century. Ultimately,

6213-479: The company has demonstrated credibility and potential from successful outcomes: clinical trials, market research, patent registrations, etc. This shift in market expectations has led to an increased reliance on private equity and venture capital funding in the early stages of high-tech companies. This is quite different from the situation of the 1990s to early-2000s period, when a number of companies (particularly Internet boom and biotechnology companies) went public in

6322-784: The context of the privatization of services or government functions, where private entities are tasked with the implementation of government programs or the performance of government services. Gillian E. Metzger has written that: "Private entities [in the US] provide a vast array of social services for the government; administer core aspects of government programs; and perform tasks that appear quintessentially governmental, such as promulgating standards or regulating third-party activities." Metzger mentions an expansion of privatization that includes health and welfare programs, public education, and prisons. The history of privatization dates from Ancient Greece , when governments contracted out almost everything to

6431-512: The cost of bureaucracy was one of the reasons for the fall of the Roman Empire . Perhaps one of the first ideological movements towards privatization came during China 's golden age of the Han dynasty . Taoism came into prominence for the first time at a state level, and it advocated the laissez-faire principle of Wu wei (無為), literally meaning "do nothing". The rulers were counseled by

6540-714: The countries suggest that a large segment of the public is dissatisfied with or have negative views of privatization in the region. In the 1990s, the governments in Eastern and Central Europe engaged in extensive privatization of state-owned enterprises in Eastern and Central Europe and Russia, with assistance from the World Bank , the U.S. Agency for International Development, the German Treuhand , and other governmental and non-governmental organization . Nippon Telegraph and Telephone 's privatization in 1987 involved

6649-776: The first attempt at a social welfare analysis of the British privatization program under the Conservative governments of Margaret Thatcher and John Major during the 1980s and 1990s, Massimo Florio points to the absence of any productivity shock resulting strictly from ownership change. Instead, the impact on the previously nationalized companies of the UK productivity leap under the Conservatives varied in different industries. In some cases, it occurred prior to privatization, and in other cases, it occurred upon privatization or several years afterward. A 2012 study published by

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6758-441: The general public and trade shares on public exchanges) tend to have better management records than privately held companies (those companies where shares are not publicly traded, often owned by the company founders, their families and heirs, or otherwise by a small group of investors). Despite this claim, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on

6867-551: The government. One such service was the feeding of geese on the Capitoline Hill as a reward to the birds after their honking warned of a Gallic invasion in 390 B.C. Participants in such organizations had partes or shares, a concept mentioned various times by the statesman and orator Cicero . In one speech, Cicero mentions "shares that had a very high price at the time". Such evidence, in Malmendier's view, suggests

6976-566: The instruments were tradable, with fluctuating values based on an organization's success. The societas declined into obscurity in the time of the emperors, as most of their services were taken over by direct agents of the state. Tradable bonds as a commonly used type of security were a more recent innovation, spearheaded by the Italian city-states of the late medieval and early Renaissance periods. Joseph de la Vega , also known as Joseph Penso de la Vega and by other variations of his name,

7085-411: The issue and redemption of such securities and instruments and capital events including the payment of income and dividends . Securities traded on a stock exchange include stock issued by listed companies , unit trusts , derivatives , pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets with buyers and sellers consummating transactions via open outcry at

7194-483: The largest share offering in financial history at the time. 15 of the world's 20 largest public share offerings have been privatizations of telecoms. In 1988, the perestroika policy of Mikhail Gorbachev started allowing privatization of the centrally planned economy. Large privatization of the Soviet economy occurred over the next few years as the country dissolved . Other Eastern Bloc countries followed suit after

7303-442: The late Middle Ages. In the 14th century, Venetian lenders would carry slates with information on the various issues for sale and meet with clients, much like a broker does today. Venetian merchants introduced the principle of exchanging debts between moneylenders ; a lender looking to unload a high-risk, high-interest loan might exchange it for a different loan with another lender. These lenders also bought government debt issues. As

7412-445: The major stock exchanges have demutualized , where the members sell their shares in an initial public offering . In this way the mutual organization becomes a corporation, with shares that are listed on a stock exchange. Examples are Australian Securities Exchange (1998), Euronext (merged with New York Stock Exchange), NASDAQ (2002), Bursa Malaysia (2004), the New York Stock Exchange (2005), Bolsas y Mercados Españoles , and

7521-400: The middle of the 1930s. The firms belonged to a wide range of sectors: steel, mining, banking, local public utilities, shipyard, ship-lines, railways, etc. In addition to this, delivery of some public services produced by public administrations prior to the 1930s, especially social services and services related to work, was transferred to the private sector, mainly to several organizations within

7630-467: The more competitive the industry, the greater the improvement in output, profitability, and efficiency. Such efficiency gains mean a one-off increase in GDP , but through improved incentives to innovate and reduce costs also tend to raise the rate of economic growth . More recent research and literature review performed by Professor Saul Estrin and Adeline Pelletier concluded that "the literature now reflects

7739-468: The most prominent stock exchanges around the world in the total absence of sales, earnings, or any type of well-documented promising outcome. Though it is not as common, it still happens that highly speculative and financially unpredictable hi-tech startups are listed for the first time in a major stock exchange. Additionally, there are smaller, specialized entry markets for these kind of companies with stock indexes tracking their performance (examples include

7848-621: The natural evolution of their business continued, the lenders began to sell debt issues to the first individual investors. The Venetians were the leaders in the field and the first to start trading securities from other governments, yet did not embark on private trade with India. Nor did the Italians connect on land with the Chinese Silk Road . Along the potential overland trade route, Holy Roman Emperor Frederick II repulsed advances by Mongol Batu Kahn ( Golden Horde ) in 1241. There

7957-408: The needed time to wait for a return. Another economic factor that influences this area is the resulting efficiency of SOEs once privatised. Commonly, governments aren’t able to provide the required investments required to ensure profitability for various reasons. These factors may lead to a government deciding to privatize. There are several main methods of privatization: The choice of sale method

8066-446: The ones more in need of these services." The increase in privatization since the 1980s has been a factor in rising income and wealth inequality in the United States. Due to low levels of native capital accumulation in the former Central and Eastern Europe, the rapid privatization preferred by international institutions ( EBRD , IMF , World Bank ) and other foreign banks was a de facto call for international bidding, reflecting

8175-417: The operations and functions of the exchange. Additionally, the stock exchange's role in facilitating capital formation and investment in businesses also indirectly contributes to job creation and economic growth, making it a significant player in the employment landscape. The stock exchange plays a role in regulating companies by exerting a significant influence on their management practices. To be listed on

8284-689: The original article are simply not robust." A subsequent body of scholarship, while still controversial, demonstrates that rapid privatization schemes associated with neoliberal economic reforms did result in poorer health outcomes in former Eastern Bloc countries during the transition to markets economies, with the World Health Organization contributing to the debate by stating "IMF economic reform programs are associated with significantly worsened tuberculosis incidence, prevalence, and mortality rates in post-communist Eastern European and former Soviet countries." Historian Walter Scheidel ,

8393-430: The other hand, however, privatisation has been largely met with a negative criticism and citizen coalitions. This neoliberal criticism highlights the ongoing conflict between varying visions of economic development. Karl Polanyi emphasizes the societal concerns of self-regulating markets through a concept known as a "double movement". In essence, whenever societies move towards increasingly unrestrained, free-market rule,

8502-628: The overall integrity and reliability of the financial markets, fostering an environment where companies are held accountable for their actions and decisions, ultimately benefiting both investors and the broader economy. Each stock exchange imposes its own listing requirements upon companies that want to be listed on that exchange. Such conditions may include minimum number of shares outstanding, minimum market capitalization, and minimum annual income. The listing requirements imposed by some stock exchanges include: Stock exchanges originated as mutual organizations , owned by its member stockbrokers. However,

8611-873: The part of some public companies, particularly in the cases of accounting scandals . The policies that led to the dot-com bubble in the late 1990s and the subprime mortgage crisis in 2007–08 are also examples of corporate mismanagement. The mismanagement of companies such as Pets.com (2000), Enron (2001), One.Tel (2001), Sunbeam Products (2001), Webvan (2001), Adelphia Communications Corporation (2002), MCI WorldCom (2002), Parmalat (2003), American International Group (2008), Bear Stearns (2008), Lehman Brothers (2008), General Motors (2009) and Satyam Computer Services (2009) all received plenty of media attention. Many banks and companies worldwide utilize securities identification numbers ( ISIN ) to identify, uniquely, their stocks, bonds and other securities. Adding an ISIN code helps to distinctly identify securities and

8720-709: The primary responsibility of the Airports Branch of the Department of Infrastructure & Regional Development is the regulation of 21 leased federal airports on Commonwealth land. The Branch administers the Airports Act 1996 , its associated regulations and the airport head leases. Privatisation Privatization (rendered privatisation in British English ) can mean several different things, most commonly referring to moving something from

8829-412: The principal when the bonds mature. At the stock exchange, share prices rise and decreases depending, largely, on economic forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. A recession , depression , or financial crisis could eventually lead to a stock market crash . Therefore, the movement of share prices and in general of

8938-548: The private sector. In the Roman Republic private individuals and companies performed the majority of services including tax collection ( tax farming ), army supplies ( military contractors ), religious sacrifices and construction. However, the Roman Empire also created state-owned enterprises —for example, much of the grain was eventually produced on estates owned by the Emperor. David Parker and David S. Saal suggest that

9047-464: The private sector. In the 1990s, privatization revenue from 18 Latin American countries totaled 6% of gross domestic product. Private investment in infrastructure from 1990 and 2001 reached $ 360.5 billion, $ 150 billion more than in the next emerging economy. While economists generally give favorable evaluations of the impact of privatization in Latin America, opinion polls and public protests across

9156-887: The privatization of common lands is referred to as enclosure (in Scotland as the Lowland Clearances and the Highland Clearances ). Significant privatizations of this nature occurred from 1760 to 1820, preceding the Industrial Revolution in that country. The first mass privatization of state property occurred in Nazi Germany between 1933 and 1937: "It is a fact that the government of the National Socialist Party sold off public ownership in several state-owned firms in

9265-575: The privatized businesses were bought by foreigners (chiefly West Germans – 75%). Romania's first privatization took place on 3 August 1992. There was "very little" privatization during 1992: only 22 state-owned enterprises were privatized. The pace picked up throughout the following year, with more than 260 companies privatized. Four of the 22 enterprises privatized in 1992 were sold to foreign investors. In 1993, 265 companies were privatized, followed by 604 in 1994. Two companies were sold to foreign investors during this period, one each in 1993 and 1994. At

9374-439: The public market provided by the stock exchanges has been one of the most important funding sources for many capital intensive startups . In the 1990s and early 2000s, hi-tech listed companies experienced a boom and bust in the world's major stock exchanges. Since then, it has been much more demanding for the high-tech entrepreneur to take his/her company public, unless either the company is already generating sales and earnings, or

9483-448: The public sector into the private sector. It is also sometimes used as a synonym for deregulation when a heavily regulated private company or industry becomes less regulated. Government functions and services may also be privatised (which may also be known as "franchising" or "out-sourcing"); in this case, private entities are tasked with the implementation of government programs or performance of government services that had previously been

9592-465: The purview of state-run agencies. Some examples include revenue collection, law enforcement , water supply , and prison management . Another definition is that privatization is the sale of a state-owned enterprise or municipally owned corporation to private investors; in this case shares may be traded in the public market for the first time, or for the first time since an enterprise's previous nationalization . This type of privatization can include

9701-428: The regional water authorities (mostly in 1989). After 1979, council house tenants in the UK were given the right to buy their homes (at a heavily discounted rate). One million purchased their residences by 1986. Such efforts culminated in 1993 when British Rail was privatized under Thatcher's successor, John Major . British Rail had been formed by prior nationalization of private rail companies. The privatization

9810-425: The sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have widely reported the grand corruption that accompanied those sales, according to research released by the World Bank there has been increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption

9919-504: The sales may not raise as much capital as would be justified by the fair value of the company being privatized. Many governments, therefore, elect for listings in more sophisticated markets, for example, Euronext , and the London , New York and Hong Kong stock exchanges. Governments in developing countries and transition countries more often resort to direct asset sales to a few investors, partly because those countries do not yet have

10028-569: The start of 1999, 4,330 companies were left to be privatized, with 5,476 having been sold during 1993–1998. At the end of 1998, only 2.4% of privatized companies had foreign participation. Arguments for and against the controversial subject of privatization are presented here. Stock exchange A stock exchange , securities exchange , or bourse is an exchange where stockbrokers and traders can buy and sell securities , such as shares of stock , bonds and other financial instruments . Stock exchanges may also provide facilities for

10137-440: The stock exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate, in the short term, direct taxation of citizens to finance development—though by securing such bonds with the full faith and credit of the government instead of with collateral, the government must eventually tax citizens or otherwise raise additional funds to make any regular coupon payments and refund

10246-411: The stock market, bidders compete to offer higher prices, generating more revenue for the state. Voucher privatization, on the other hand, could represent a genuine transfer of assets to the general population, creating a sense of participation and inclusion. A market could be created if the government permits transfer of vouchers among voucher holders. Some privatization transactions can be interpreted as

10355-434: The subsequent sale of state-run firms saw the number of shareholders double by 1985. By the time of her resignation in 1990, there were more than 10 million shareholders in Britain. Privatization in Latin America was extensive in the 1980s and 1990s, as a result of a Western liberal economic policy. Companies providing public services such as water management , transportation, and telecommunications were rapidly sold off to

10464-470: The success of businesses can be seen as a form of wealth redistribution within the financial markets. Both casual and professional stock investors , as large as institutional investors or as small as an ordinary middle-class family , through dividends and stock price increases that may result in capital gains , share in the wealth of profitable businesses. Unprofitable and troubled businesses may result in capital losses for shareholders. By having

10573-402: The voices of workers, community members and academics. Some reports show that the results of privatization are experienced differently between men and women for numerous reasons: when public services are privatized women are expected to take on the health and social care of dependents , women have less access to privatized goods, public sector employs a larger proportion of women than does

10682-524: The word came to German through French from the Latin privatus . The term reprivatization , again translated directly from German ( Reprivatisierung ), was used frequently in the mid-1930s as The Economist reported on Nazi Germany's sale of nationalized banks back to public shareholders following the 1931 economic crisis. The word became common in the late 1970s and early 1980s as part of UK prime minister Margaret Thatcher's economic policies . She

10791-556: The world. Results of privatization may vary depending on the privatization model employed. According to Irwin Stelzer , "it is somewhere between difficult and impossible to separate the effects of privatisation from the effects of such things as trends in the economy". According to research performed by the World Bank and William L. Megginson in the early 2000s, privatization in competitive industries with well-informed consumers, consistently improved efficiency. According to APEC ,

10900-410: Was acting in effect as France's central banker. Investors snapped up shares in both, and whatever else was available. In 1720, at the height of the mania, there was even an offering of "a company for carrying out an undertaking of great advantage, but nobody to know what it is". By the end of that same year, share prices had started collapsing, as it became clear that expectations of imminent wealth from

11009-481: Was always private, but heavily regulated, which becomes less regulated through a process of deregulation . The term may also be used descriptively for something that has always been private, but could be public in other jurisdictions. There are also private entities that may perform public functions. These entities could also be described as privatized. Privatization may mean the government sells state-owned businesses to private interests, but it may also be discussed in

11118-401: Was an Amsterdam trader from a Spanish Jewish family and a prolific writer as well as a successful businessman in 17th-century Amsterdam. His 1688 book Confusion of Confusions explained the workings of the city's stock market . It was the earliest book about stock trading and inner workings of a stock market, taking the form of a dialogue between a merchant, a shareholder and a philosopher,

11227-410: Was controversial, and its impact is still debated today , as doubling of passenger numbers and investment was balanced by an increase in rail subsidy . This has been reverted by the same party in Britain in the early 2020s with the state-owned Great British Railways . The United Kingdom's largest public share offerings were privatizations of British Telecom and British Gas during the 1980s under

11336-505: Was drawing on the work of the pro-privatization Member of Parliament David Howell , who was himself drawing on the Austrian-American management expert Peter Drucker 's 1969 book, The Age of Discontinuity . The word privatization may mean different things depending on the context in which it is used. It can mean moving something from the public sphere into the private sphere, but it may also be used to describe something that

11445-557: Was leased to a newly formed Australia Pacific Airports Corporation for $ 1.3 billion, with the transfer being completed on 30 June 1997. Brisbane Airport was lease for $ 1.4 billion to Brisbane Airport Corporation. Australia Pacific Airports Corporation also obtained a 90% stake in Launceston Airport for $ 19 million on 29 May 1998, with the Launceston City Council owning the remaining 10%. Perth Airport

11554-601: Was leased to the Australian Development Group in 1997. By 30 June 1998 all significant assets and liabilities of the FAC were transferred to the new airport lessee companies. The FAC continued airport operations until 24 September 1998 and the transfer of residual assets and liabilities to the Federal Government was not completed until 8 September 1999. Sydney Airport Corporation acquired the lease for Sydney Airport in 2002. At present

11663-609: Was most improved out of all the 27 EU nations from 1997 to 2012. The report examined a range of 14 different factors and the UK came top in four of the factors, second and third in another two and fourth in three, coming top overall. Nonetheless, the impact of the privatisation of British Rail has been the subject of much debate, with the stated benefits including improved customer service, and more investment; and stated drawbacks including higher fares, lower punctuality and increased rail subsidies. Privatizations in Russia and Latin America were accompanied by large-scale corruption during

11772-653: Was posting regular lists of stock and commodity prices. Those lists mark the beginning of the London Stock Exchange . One of history's greatest financial bubbles occurred around 1720. At the center of it were the South Sea Company , set up in 1711 to conduct English trade with South America, and the Mississippi Company , focused on commerce with France's Louisiana colony and touted by transplanted Scottish financier John Law , who

11881-480: Was set up the following year. Soon thereafter, English joint-stock companies began going public. London's first stockbrokers, however, were barred from the old commercial center known as the Royal Exchange, reportedly because of their rude manners. Instead, the new trade was conducted from coffee houses along Exchange Alley . By 1698, a broker named John Castaing, operating out of Jonathan's Coffee House ,

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