Economic Liberalization and Changes in Corporate Control in Latin America Forthcoming in Developing Economies, Institute of Developing Economies, Japan Germano Mendes De Paula, João Carlos Ferraz and Mariana Iootty* Abstract This article analyzes ownership restructuring and changes in corporate control in four large Latin American countries: Argentina, Brazil, Chile, and Mexico, during the 1990s. Drawing on original firm-level data, this is a comparative study aimed at identifying cross-country differences and regularities. It focuses on transactions associated with privatizations and private merger and acquisitions (M&A), their evolution, relative importance, sectoral incidence and the role played by different types of investors: local, foreign and joint ventures. A specially built database was used in the analysis, comprising 3,085 private M&A transactions, of which 1,535 have their values declared, and a database on 329 privatization transactions, of which 97% have reported sale values. Although similar to processes occurring elsewhere, in this article it is argued that ownership restructuring in Latin America was facilitated and fostered by specific changes in policy associated institutional framework conditions. That is, the wide range process of ownership restructuring is strongly associated with economic liberalization, which has become the main feature of Latin American national regimes of incentives and regulation. Given their depth and breath, the ownership landscape of these countries is significantly internationalized, opening relevant questions in relation to the style and possibilities of future development of Latin America. Key Words: economic liberalization, privatization, merger and acquisition, Latin America Introduction The last decade has witnessed a substantial acceleration in privatizations and private mergers and acquisitions (M&As) all over the world, measured both in terms of number and value of transactions. For instance, according to UNCTAD (2000, pp. xix and 129), the total number of M&As around the globe has grown above 40% annually since 1980 and cross border * Instituto de Economia, Universidade Federal de Uberlândia, Brazil and Instituto de Economia, Universidade Federal do Rio de Janeiro, Brazil. Correspondence to De Paula at germano@ufu.br. We would like to thank N. Hamaguchi and researchers participating in the 2000 and 2001 Rio Workshop on International M&A for comments on earlier drafts; Edmund Amann discussed the role of UK-based companies in Latin America; Jane Cristina Andretta, Edileuza Pereira Silva, Hereaclécea Peres Damasceno, José Borges da Silva Neto, Tatiana Maria Couto da Silva and Thais Regina Oliveira Spanazzi assisted the authors. CNPq, FAPERJ, CAPES and Japan Foundation provided financial support and Thomsom Financial Securities Data the access to the basic information upon which the database for the analysis was built up.