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The objective of this paper is to analyze the effect of privatization on the performance of firms by using a panel data set of 38 companies that were privatized in Europe. We compare the profit, profitability, total product, operating efficiency, net income, employment, leverage and risk of these SOEs before and after their privatization. The legal environment, regulation, goals of privatization and competition characterize each sector, which is why we split the total sample into sectors. Our results indicate that the performance of companies in the utility industry is significantly better after privatization; however, we cannot assert this for the other sectors.
Published Online: 2012-5-16
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
