The purposes of the paper are to determine whether governments underprice shares in fixed-price share-issue privatizations (SIPs) and, if so, what their motivations are for doing so. This paper develops three models of SIP underpricing: one based on revenue goals, one based on political goals...

We examine the role of a country's institutional framework for investment and financing activities. A country's financial structure, investor rights, and legal environment are important determinants of the relation between internal cash flow and firms' investment and financing behavior. Firms...