Post Privatisation Operating and Financial Performance of Newly Privatised Firms: Evidence From Pakistan

Ahmad, Sardar (2010). Post Privatisation Operating and Financial Performance of Newly Privatised Firms: Evidence From Pakistan. MRes thesis The Open University.

DOI: https://doi.org/10.21954/ou.ro.0000f23e

Abstract

This study investigates post privatisation operating and financial performance of newly privatised firms in Pakistan. The sample consists of fifteen firms privatised in the period 2002 - 2008. Operating performance of newly privatised firms in this study is measured over a four year period including the year of privatisation. The three years trend of post privatisation operating performance is compared to operating performance in the year of privatisation. Financial performance is measured using buy-and-hold abnormal returns (BHAR). Results of the study show that post privatisation, profitability, efficiency and pay out increases, while leverage decreases for more than 50% of the sample firms. The results also indicate that firms privatised through different methods of privatisation show different trends in post privatisation operating performance. Findings regarding the post privatisation financial performance show that BHAR are negative for all of the sample firms over the three years horizon, while different methods used to privatise state owned enterprises (SOEs) does not affect post privatisation BHARs of newly privatised firms.