Negative consequences of nationalization seen through Chilean corporate cases
- 1President Salvador Allende launched a large-scale nationalization program targeting major Chilean companies in 1970.
- 2Between 1967 and 1973, 32 major Chilean companies that were nationalized experienced an 11-13% decline in return on assets (ROA) following nationalization.
- 3In the 1973 local elections, the ruling coalition suffered a loss of 1% to 4% in vote share in municipalities where nationalized factories and companies were located.
So what's the key point?
A president in Chile changed large companies to state ownership. During this process, corporate profitability fell by about 13% and the ruling group's vote share also decreased.
Source Klement on Investing · View original ↗
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