Should state-owned firms change CEOs before privatization? Some evidence from the telecommunications industry

Should state-owned enterprises change chief executive officer (CEO) before privatizing? We test competing views on this question by complementing a recently released database with newly collected data. We are able to cover 77 telecommunications privatizations, which account for nearly 80% of the sector in terms of value. We find that CEO replacement will improve performance in the telecommunications industry before privatization as measured by penetration, operating efficiency and profitability. Chief executive officer change before privatization does appear to have real consequences in firm performance before privatization.