Financial History Review

Table of Contents - April 2012 - Volume 19, Issue 01  

Articles

From market to state: wealth transfers in the Portuguese nationalisations of the 1970s1

Rui Alpalhãoa1

a1 Instituto Universitário de Lisboa (ISCTE-IUL) rui.alpalhao@iscte.pt

Abstract

In the second half of the 1970s, following the so-called ‘Carnation Revolution’ and when a global wave of privatisations started, the Portuguese government nationalised most of the companies listed on the Lisbon Exchange. A few years later the shareholders of nationalised companies were paid indemnities. The nationalisations radically changed the Portuguese corporate scene and led to very important wealth transfers. Contrary to what is usually assumed, we conclude that this transfer was detrimental to holders of large shareholdings, but favourable to small shareholders and, on average, akin to fair compensation based on market exchange.

(Received July 24 2008)

(Revised March 17 2010)

(Accepted March 14 2011)

(Online publication October 18 2011)

Keywords

  • nationalisations;
  • indemnities;
  • wealth transfers

JEL Codes

  • G14;
  • G18

Footnotes

1 This article draws upon the author's doctoral dissertation. The support and helpful comments of the thesis supervisor, António Gomes Mota, of thesis committee members António Nogueira Leite, Miguel Athayde Marques, Clara Raposo and José Paulo Esperança, and of the editors and two anonymous referees are gratefully acknowledged. This research was supported by a grant from Fundação para a Ciência e Tecnologia, a body of the Portuguese Ministry of Science, Technology and Higher Education. All remaining errors are the author's sole responsibility.