Definition Nationalization. Description.
Nationalization is the process whereby a government
takes over the assets, control and business of a company. It involves a
transfer of property rights from the private sector to the
When it is carried out under a proper legal system and when
the private owners are compensated fairly, there is nothing wrong with it,
although the results in economic sense generally are poor.
But especially when performed by a country without or in violation
of a proper legal system or when the private owners (investors) are not compensated
fairly, nationalization is extremely negative news for its existing investors
and a strong signal to potential investors to avoid investing in such a country.
Gaining control of certain companies of strategic economic
importance typically involves infrastructural companies, such as railways,
airports, airlines, banks. Sometimes also industrial firms.
The opposite is called: privatization.
Nationalization Special Interest Group
Compare with: Liquidation
Value | Globalization