Are private firms more efficient than public ones? Does privatisation improve performance? In order to answer these questions, it is necessary to disentangle the impact of ownership and competition upon business performance. This paper presents empirical evidence relating to the hypothesis that...

Using data from U.S. corporate tax returns, we investigate the differential investment propensities of public and private firms. Tax return data uniquely provide rich detail on corporate investment reported under identical standards and is representative of the universe of U.S. corporations....

Private firms' ability to communicate confidentially with selected investors implies that valuation disagreements between firms and investors are larger at public firms than at private ones. Consistent with the notion that misvaluation concerns lead public firms to hoard cash to be able to...