Nationalization

AAA

DEFINITION of 'Nationalization'

Refers to the process of a government taking control of a company or industry, which can occur for a variety of reasons. When nationalization occurs, the former owners of the companies may or may not be compensated for their loss in net worth and potential income.

Nationalization is most common in developing countries subject to frequent leadership and regime changes. In these instances, nationalization is often a way for a government to expand its economic resources and power.

The opposite of nationalization is privatization, when government-owned companies are spun off into the private business sector.

INVESTOPEDIA EXPLAINS 'Nationalization'

In the United States, true nationalization is a rare occurrence. The last true nationalization of an industry was the government takeover of airport security after the September 11th tragedies in 2001. Prior to that, there were some selective nationalizations of savings and loan institutions in the early 1980s, as well as much of the railroad industry in the 1970s.

Many have argued that the government takeover of a number of failing companies, such as GM and AIG, has also amounted to nationalization, even though the U.S. government exerts very little control over these companies.

RELATED TERMS
  1. Denationalization

    The act of changing a government-run firm into a private-sector ...
  2. Condemnation

    The seizure of a property by a public authority for a public ...
  3. Renationalization

    Bringing assets and/or industries back into national-government ...
  4. Privatization

    1. The transfer of ownership of property or businesses from a ...
  5. Expropriation

    The act of taking of privately owned property by a government ...
  6. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
Related Articles
  1. Personal Finance

    State-Run Economies: From Public To Private

    Find out how former Iron Curtain countries used private enterprise to join the world financial markets.
  2. Options & Futures

    Why Public Companies Go Private

    Privatization can give management more time to make money for investors, but at what cost?
  3. Insurance

    The Globalization Of Financial Services

    The key to survival for many financial institutions will be to efficiently serve a global customer base.
  4. Stock Analysis

    How CVS Grew Into a Drugstore Giant

    Want proof that brick-and-mortar businesses aren't dead? Just look at this company.
  5. Investing Basics

    What are key points to a good corporate social responsibility policy?

    Learn the main components of a good corporate social responsibility policy, including communication with stakeholders, partnerships and measurement tools.
  6. Personal Finance

    What are the top trends in corporate social responsibility?

    Learn about top trends in corporate social responsibility. Companies are increasing transparency, innovating, investing locally and addressing inequalities.
  7. Entrepreneurship

    How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading the word about the firm.
  8. Brokers

    How does lack of corporate social responsibility hurt a company's bottom line?

    Learn about the perils of a lack of corporate social responsibility. Examine the WorldCom fraud, which led to its bankruptcy and imprisonment for its officers.
  9. Investing

    Corporate Governance

    Corporate governance refers to the formally established guidelines that determine how a company is run. The company’s board of directors approves and periodically reviews the guidelines, which ...
  10. Investing

    How does goodwill increase a company's value?

    Learn about the basics of goodwill in the business world, what positive effects it can have on a company's overall value and how it can be calculated.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center