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, Telefónica 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.