Abstract
The purpose of Raj Chari’s book is to decipher what happened to state-owned enterprises (SOEs) after they were privatised in the United Kingdom, France, Italy, Germany and Spain. To answer this, he offers a fresh conceptualisation arising out of a review of the literature on both privatisations and mergers and acquisitions (M&A). The focus on those areas arises, in part, because of the nature of M&A activity of privatised firms. There is strong evidence that privatised firms have merged and been acquired in recent decades, and Chari seeks to determine how the firms can be characterised today from a theoretical perspective. In doing so, he differentiates (using robust empirical tests) between firms he calls ‘alphas’ (global leaders that have never been taken over) and ‘betas’ (not global leaders and have been taken over).
To understand why firms became alphas or betas, the book considers a number of factors such as the role of the state during privatisation, competitiveness of firms, liberalisation policies, the role of regulatory authorities and the influence of lobbying. These factors are given context in chapters 3, 4 and 5 where the book offers empirical analyses of privatisations in the airline, automobile and electricity sectors. From the findings, Chari develops an inductive theory for which he provides the acronym ‘LIFESHAPERS’. The conclusion is that the impact of liberalisation, the influence of states and the actions of regulatory authorities all influence whether a firm becomes an alpha or beta.
Overall, Chari’s book is effective in logically guiding the reader through the gap that exists in the literature between privatisation and M&A. His use of signposting and consistent use of summaries ensure that the book is easy to follow. The detailed analyses of the different sectors and good evidence underlying the analyses offer new and useful insights into what happened to firms after privatisation and why firms can be characterised as ‘alpha’ or ‘beta’. The use of the ‘alpha–beta’ theoretical conceptualisation is not only helpful in deconstructing the key issues in the book, but it has further application for social scientists seeking to determine what happened to any privatised firm. Finally, while the use of the acronym ‘LIFESHAPERS’ at first appears to be odd, the theory underlying it is well evidenced and the memorable term helps the reader to easily recollect the conclusions of the work – conclusions which help to shed light on an important yet seldom researched area.
To understand why firms became alphas or betas, the book considers a number of factors such as the role of the state during privatisation, competitiveness of firms, liberalisation policies, the role of regulatory authorities and the influence of lobbying. These factors are given context in chapters 3, 4 and 5 where the book offers empirical analyses of privatisations in the airline, automobile and electricity sectors. From the findings, Chari develops an inductive theory for which he provides the acronym ‘LIFESHAPERS’. The conclusion is that the impact of liberalisation, the influence of states and the actions of regulatory authorities all influence whether a firm becomes an alpha or beta.
Overall, Chari’s book is effective in logically guiding the reader through the gap that exists in the literature between privatisation and M&A. His use of signposting and consistent use of summaries ensure that the book is easy to follow. The detailed analyses of the different sectors and good evidence underlying the analyses offer new and useful insights into what happened to firms after privatisation and why firms can be characterised as ‘alpha’ or ‘beta’. The use of the ‘alpha–beta’ theoretical conceptualisation is not only helpful in deconstructing the key issues in the book, but it has further application for social scientists seeking to determine what happened to any privatised firm. Finally, while the use of the acronym ‘LIFESHAPERS’ at first appears to be odd, the theory underlying it is well evidenced and the memorable term helps the reader to easily recollect the conclusions of the work – conclusions which help to shed light on an important yet seldom researched area.
| Original language | English |
|---|---|
| Number of pages | 2 |
| Journal | Political Studies Review |
| Publication status | Published - 30 Jun 2016 |
| Externally published | Yes |